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Tuesday 4 January 2011
American Samoa Department of Education Official Pleads Guilty to Bribery ConspiracyRead the Press Release
WASHINGTON - The director of the school bus division of the U.S. Territory of American Samoa’s Department of Education pleaded guilty today to conspiracy to commit federal program bribery, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Gustav Nauer, 46, a resident of American Samoa, pleaded guilty to one count of conspiracy to commit federal program bribery before U.S. Magistrate Judge Barry M. Kurren of the U.S. District Court for the District of Hawaii.
As part of his guilty plea, Nauer admitted to participating in a scheme that began in late 2002 involving other American Samoa Department of Education employees as well as the owner and operator of a company that sold school bus parts to the American Samoa government. As part of the scheme, Nauer and other government officials arranged to order "phantom" bus parts that were never received by the government, as well as bus parts at inflated prices, from the company. In exchange, Nauer admitted that he and other government officials were paid approximately $300,000 in bribes from January 2003 until October 2006.
Nauer faces a maximum of five years in prison and a $250,000 fine on the conspiracy charge. A sentencing date has not been scheduled.
This case is being prosecuted by Trial Attorneys Timothy J. Kelly and Kathryn H. Albrecht of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI, the Office of Inspector General for the U.S. Department of the Interior, and the Office of Inspector General for the U.S. Department of Education.
Monday 3 January 2011
Henry G. Hobbs Jr. Appointed Acting U.S. Trustee for Louisiana, MississippiRead the Press Release
WASHINGTON - Henry G. Hobbs Jr. has been appointed by Attorney General Eric Holder as Acting U.S. Trustee for Louisiana and Mississippi (Region 5), effective immediately, the Executive Office for U.S. Trustees announced today. Mr. Hobbs replaces R. Michael Bolen, who retired after 22 years of service with the U.S. Trustee Program (USTP).
Mr. Hobbs has headed the USTP's office in Austin, Texas, as Assistant U.S. Trustee since 1992. From 2005 to 2007, he was detailed to the Executive Office for U.S. Trustees in Washington, D.C., as Acting Chief of the USTP's new Credit Counseling and Debtor Education (CCDE) Unit. In 2006 Mr. Hobbs received the Attorney General's Award for Distinguished Service along with several others who helped develop the CCDE Unit. Before joining the USTP, Mr. Hobbs engaged in the private practice of law for 11 years in Shreveport, La. He received his law degree from Louisiana State University Law Center in Baton Rouge, La., and his undergraduate degree from Louisiana State University in Baton Rouge.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 5 is headquartered in New Orleans, La., with additional offices in Shreveport, La., and Jackson, Miss.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Former Wealth Manager Pleads Guilty to Causing a Presidential Campaign Committee to Submit False Statements to the Federal Election CommissionRead the Press Release
WASHINGTON - A former principal of a wealth management firm pleaded guilty today in U.S. District Court for the District of Columbia to causing the Hillary Clinton for President Committee unwittingly to submit false statements to the Federal Election Commission (FEC), announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. The guilty plea was accepted by U.S. District Judge Paul L. Friedman.
Evan Snapper, 46, of Fairfield, Conn., was charged in a one-count criminal information filed on Dec. 3, 2010, which alleged that he knowingly and willfully caused the committee unwittingly to file materially false reports with the FEC. The information charged that those reports falsely showed that 21 individuals known to Snapper had contributed $2,300 each to the committee when, as Snapper admitted, the contributions had actually been made by one individual.
According to court documents, the individual was a client of the firm where Snapper had served as a principal. In that capacity, Snapper had authorized access to bank accounts associated with the individual. Snapper admitted that in March 2008, he informed the individual that Elton John was scheduled to perform a concert in New York City on April 9, 2008, and that the proceeds from the ticket sales would be contributed to support the committee. Snapper admitted knowing that the individual supported the candidate and that when the individual asked Snapper what could be done to help the committee, Snapper suggested that the individual could find people to buy tickets to the concert. According to court documents, the individual suggested that the individual would call family members and friends and reimburse them for the tickets that they purchased for the concert. Snapper admitted that when this suggestion was made, he knew that reimbursements of political contributions violated campaign finance regulations.
Snapper admitted that he and 20 people agreed to purchase a ticket to the concert, with the understanding that they would be reimbursed by the individual. Snapper admitted having direct or indirect contact with all of these people to coordinate the ticket purchases and reimbursements. Snapper admitted that, believing he was authorized to do so, he caused the 21 reimbursements to be made from the funds of the individual. He admitted that he took steps on his own initiative to conceal the true purpose of the payments as reimbursements for political contributions. These steps included causing some of the reimbursements to be made in amounts that were not multiples of $2,300; to be made in part by check and in part by cash; and to be misrepresented in the individual’s financial account ledgers as payments for purposes other than reimbursements for political contributions. In total, Snapper caused the source of $48,300 in individual contributions to the committee to be falsely reported to the FEC.
In addition, Snapper admitted that in 2007, at the individual’s request, he and his wife made total contributions in the amount of $4,600 and $9,200 to the Jim Gilmore for President Committee and the Gilmore for Senate Committee, respectively. Snapper admitted that, believing he was authorized to do so, he caused reimbursements for those contributions to be made from the individual’s funds. In total, Snapper admitted that he caused the source of $13,800 in individual contributions to the Gilmore Committees unwittingly to be falsely reported to the FEC.
At sentencing, scheduled for Apr. 7, 2011, Snapper faces a maximum penalty of five years in prison and a $250,000 fine.
This case is being prosecuted by Trial Attorneys Daniel A. Petalas and Edward T. Kang of the Criminal Division’s Public Integrity Section. This case is being investigated by the FBI.
Former Colombian Maritime Training Instructor and Co-Conspirator Plead Guilty to U.S. Drug ChargesRead the Press Release
WASHINGTON – A former Colombian maritime training instructor and a co-conspirator have pleaded guilty to conspiring to transport thousands of kilograms of cocaine from various ports along the coast of Colombia to waiting vessels that transported the cocaine to the United States and other countries, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
Wilson Jesus Torres-Torres, a Colombian maritime training instructor, and Baudilio Vivero-Cardenas each pleaded guilty on Dec. 30, 2010, before U.S. District Judge Ellen S. Huvelle in the District of Columbia to one count of conspiracy to violate the Maritime Drug Law Enforcement Act.
Torres-Torres and Vivero-Cardenas were charged in a one-count indictment returned in the District of Colombia on Feb. 24, 2009. They were arrested in Colombia on Sept. 30, 2009. Vivero-Cardenas was extradited to the United States on Sept. 2, 2010, and Torres-Torres was extradited to the United States on Sept. 23, 2010.
According to court documents, from September 2005 to February 2009, Torres-Torres and Vivero-Cardenas were members of a Colombian drug trafficking organization based in Buenaventura, Colombia, that transported large quantities of cocaine for various other drug trafficking organizations. The defendants admitted that they used fishing vessels and "go-fast" boats to transport thousands of kilograms of cocaine from various ports along the coast of Colombia to waiting transport vessels on the high seas, which would transport the cocaine to the United States and other countries. According to court documents, the vessels involved in the conspiracy were equipped with high frequency radios, global positioning system devices, satellite phones, large amounts of fuel, and multiple outboard motors to facilitate the transport of cocaine over long distances on the high seas until the destination or off-loading rendezvous point was reached.
Torres-Torres faces a maximum statutory penalty of life in prison and a $4 million fine for the charge of conspiracy to manufacture, distribute or possess five kilograms or more of controlled substances on vessels; however as part of the extradition request, the United States provided assurances to the government of Colombia that it would not seek a life term in prison. Vivero-Cardenas faces up to 40 years in prison and a $2 million fine for the charge of conspiracy to manufacture, distribute or possess 500 grams or more of controlled substances on vessels. Sentencing for both defendants is scheduled for March 25, 2011, at 11 a.m.
The case is being prosecuted by Trial Attorneys Charles D. Griffith Jr., Meredith A. Mills and Tritia L. Yuen of the Criminal Division’s Narcotic and Dangerous Drug Section. The investigation was led by the Drug Enforcement Administration’s Miami Field Division; Washington, D.C., Office; Cartagena, Colombia, Resident Office; and the Special Operations Division. Significant assistance was provided by the U.S. Coast Guard in interdicting and recovering more than 21,000 kilograms of cocaine.
Former Assisted Living Facility Chain Ceo Pleads Guilty to Tax Fraud ConspiracyRead the Press Release
WASHINGTON – Ronald E. Burrell, former chief executive officer of Caremerica Inc., pleaded guilty today to conspiring to defraud the Internal Revenue Service (IRS), the Justice Department announced. His sentencing hearing is scheduled for April 9, 2012. Burrell is a resident of Wilmington, N.C.
According to the charging document, Burrell co-owned and operated a chain of assisted living facilities (ALFs) in North and South Carolina. The ALFs were managed by Caremerica Inc., a company based in Leland, N.C., that Burrell also partly owned and operated. Burrell was the president and CEO for Caremerica, the Caremerica ALFs and other related companies. As a corporate officer, Burrell was responsible for ensuring that the Caremerica companies collected, reported and paid over federal employment taxes to the IRS. However, with Burrell at the helm, the Caremerica companies accrued more than $4.5 million in employment tax liabilities between approximately 2003 and 2006. Among other things, Burrell filed, or caused to be filed, false IRS forms that reported full payment of the employment taxes due, when in fact only a small fraction of the taxes, or none at all, were paid.
The charging document further alleges that in 2003, Burrell acquired partial ownership of Partners Pharmacy Services Inc. (PPS), which provided prescription drug and related services to the Caremerica ALFs. In April 2005, Burrell sold PPS to a subsidiary of Omnicare Inc. At the closing, Burrell received $1.6 million. The PPS sale proceeds were disbursed at a time when the IRS was attempting to collect unpaid employment taxes from the Caremerica companies, as well as from Burrell personally. To prevent the IRS from discovering the PPS proceeds, Burrell took active steps to conceal them.
At his hearing before Judge James C. Fox, sitting in Wilmington, Burrell agreed that he should be ordered to pay restitution of $4.8 million.
This case was investigated by IRS-Criminal Investigation. It is being prosecuted by Trial Attorneys Adam Hulbig, Todd Ellinwood and Kevin Lombardi of the Justice Department’s Tax Division.
Ex instructor de entrenamiento marítimo colombiano y coconspirador se declaran culpables de cargos estadounidenses de narcotráficoRead the Press Release
Un ex instructor de entrenamiento marítimo colombiano y un coconspirador se han declarado culpables de conspirar para transportar miles de quilos de cocaína de diversos puertos a lo largo de la costa de Colombia a barcos que transportaron la cocaína a los Estados Unidos y otros países, anunció el Secretario de Justicia Auxiliar Lanny A. Breuer de la División de lo Penal.
Wilson Jesús Torres-Torres, un instructor de entrenamiento marítimo colombiano y Baudilio Vivero-Cardenas se declararon culpables el 30 de diciembre de 2010, ante la Juez Federal de Distrito Ellen S. Huvelle en el Distrito de Columbia de un cargo cada uno de conspiración para violar la Ley Marítima Antidrogas.
Torres-Torres y Vivero-Cardenas fueron acusados en una acusación formal de un cargo emitida en el Distrito de Columbia el 24 de febrero de 2009. Fueron arrestados en Colombia el 30 de septiembre de 2009. Vivero-Cardenas fue extraditado a los Estados Unidos el 2 de septiembre de 2010, y Torres-Torres fue extraditado a los Estados Unidos el 23 de septiembre de 2010.
De acuerdo con el expediente judicial, de septiembre de 2005 a febrero de 2009, Torres-Torres y Vivero-Cardenas fueron miembros de una organización colombiana de narcotráfico con sede en Buenaventura, Colombia, que transportó grandes cantidades de cocaína para diversas otras organizaciones de narcotráfico. Los demandados admitieron que utilizaron barcos pesqueros y barcos rápidos para transportar miles de quilos de cocaína de diversos puertos a lo largo de la costa de Colombia a barcos de transporte en alta mar, los que a su vez transportaron la cocaína a los Estados Unidos y otros países. De acuerdo con el expediente judicial, los barcos involucrados en la conspiración estaban equipados con radios de alta frecuencia, dispositivos de sistemas de posicionamiento global, teléfonos satelitales, grandes cantidades de combustible y motores fuera de borda múltiples para facilitar el transporte de la cocaína distancias largas en alta mar hasta su destino o hasta el lugar de descarga.
Torres-Torres enfrenta una pena legal máxima de prisión perpetua y una multa de 4 millones de dólares por el cargo de conspiración para fabricar, distribuir o poseer cinco quilos o más de sustancias controladas en barcos; sin embargo, como parte de la solicitud de extradición, los Estados Unidos aseguraron al gobierno colombiano de que no pedirían la pena de prisión perpetua. Vivero-Cardenas enfrenta hasta 40 años en prisión y una multa de 2 millones de dólares por el cargo de conspiración para fabricar, distribuir o poseer 500 gramos o más de sustancias controladas en barcos. La lectura de la sentencia de ambos demandados está programada para el 25 de marzo de 2011, a las 11 a.m.
Están a cargo de la acusación en el caso los Abogados Litigantes Charles D. Griffith Jr., Meredith A. Mills y Tritia L. Yuen de la Sección de Narcóticos y Drogas Peligrosas de la División de lo Penal. La investigación fue encabezada por la División Local de Miami de la Administración de Control de Drogas; Oficina de Washington, D.C.; Oficina de Residentes en Cartagena, Colombia; y la División de Operaciones Especiales. La Guardia Costera de EE.UU. brindó asistencia significativa en el interdicto y la recuperación de más de 21,000 quilos de cocaína.
Daniel M. McDermott to Serve as U.S. Trustee for Tennessee and Kentucky for Interim PeriodRead the Press Release
WASHINGTON - Daniel M. McDermott, U.S. Trustee for Michigan and Ohio (Region 9), has been designated by Attorney General Eric Holder to also serve as the U.S. Trustee for Tennessee and Kentucky (Region 8) for an interim period, effective immediately, the Executive Office for U.S. Trustees announced today. He replaces Richard F. Clippard, who retired.
Mr. McDermott was appointed U.S. Trustee for Region 9 in 2008, after heading the Cleveland office of the U.S. Trustee Program (USTP) as Assistant U.S. Trustee from 1991 through July 2008. In 1999, Mr. McDermott was recognized with the Director's Award for Management Excellence. Prior to joining the USTP in 1988, Mr. McDermott held positions as a Bankruptcy Administrator for the U.S. Bankruptcy Court for the Northern District of Ohio and as a bank officer and assistant counsel.
Mr. McDermott received his law degree from Cleveland-Marshall College of Law in Cleveland, Ohio, and his undergraduate degree from Villanova University in Villanova, Pa.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. Region 8 is headquartered in Memphis, Tenn., with additional offices in Chattanooga and Nashville, Tenn., and Lexington and Louisville, Ky.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Attorney General Eric Holder Welcomes James Cole as Deputy Attorney GeneralRead the Press Release
WASHINGTON – Attorney General Eric Holder today welcomed James Cole as the Department of Justice’s new Deputy Attorney General. Cole was sworn in Monday by the Attorney General following President Obama’s recess appointment of Cole.
"I am pleased to welcome Jim back to the Department of Justice," said Attorney General Holder. "He will be critical in our work to keep the American people safe, ensure the fairness and integrity of our financial markets, and restore the traditional missions of the Department."
The Deputy Attorney General advises and assists the Attorney General in formulating and implementing departmental policies and programs and in providing overall supervision and direction to all organizational units of the Department. In the absence of the Attorney General, the Deputy Attorney General acts as the Attorney General.
Cole first joined the department in 1979 as part of Attorney General’s Honors Program and served there for 13 years – first as a trial attorney in the Criminal Division, and later as the Deputy Chief of the Division's Public Integrity Section, the office that handles investigation and prosecution of corruption cases against both Democratic and Republican elected and appointed officials at all levels of government.
He entered private practice in 1992 and has been a partner with Bryan Cave LLP since 1995, specializing in white collar defense. He served as a court-appointed independent monitor to businesses to establish and oversee corporate compliance programs and ensure they adhere to laws and regulations. He also counseled businesses on securities, regulatory, and criminal law issues.
While in private practice in 1995, Cole was tapped to serve as Special Counsel to the U.S. House of Representatives Committee on Standards of Official Conduct. In that role, he led an investigation into allegations that former House Speaker Newt Gingrich had improperly used tax-exempt money for partisan purposes and misled the Committee in its inquiry. His investigation led to a bipartisan resolution that was approved by an overwhelming majority of the full House, and required Speaker Gingrich to pay penalties.
In 2005, Cole was appointed to serve as an independent monitor at the insurance company AIG to review five years of transactions following a settlement with regulators involving allegations the company was setting up sham transactions to hide losses. His role there led to another appointment involving AIG in 2006, in which he was charged with developing financial reporting and regulatory compliance programs.
Cole has been a member of the adjunct faculty at Georgetown University Law Center, teaching courses on public corruption law and legal ethics, and has lectured at Harvard University’s Kennedy School of Government. He is a former chair of the American Bar Association (ABA) White Collar Crime Committee and serves as the First Vice-Chair of the ABA Criminal Justice Section.
He received his B.A. from the University of Colorado and his J.D. from the University of California-Hastings.
Attorney General Appoints Gary G. Grindler Chief of StaffRead the Press Release
WASHINGTON – Attorney General Eric Holder announced today that he has appointed Gary G. Grindler to be chief of staff to the Attorney General, effective Jan. 17, 2011. Grindler will replace Kevin Ohlson, who will be resuming his career service with the department.
"Kevin Ohlson has been an extraordinary public servant through a long career at the department, and while I am sorry to lose him from my office, I am grateful for his tireless work leading my staff the past two years," Attorney General Eric Holder said. "As he has throughout his career, Gary Grindler showed remarkable leadership under difficult circumstances as Acting Deputy Attorney General over the past year, and I could not be more pleased that he has agreed to continue that service in this new role as my chief of staff. He will continue to be a key leader in our work to protect the American people, ensure the fairness and integrity of our financial markets, and invigorate the traditional missions of the department."
Grindler served as Acting Deputy Attorney General from Feb. 5, 2010, until today. He rejoined the department in 2009 as Deputy Assistant Attorney General in the Criminal Division after previously serving in a number of roles, including as Principal Associate Deputy Attorney General and Counselor to the Attorney General, Deputy Assistant Attorney General in the Civil Division, and as an Assistant U.S. Attorney in the Southern District of New York and the Northern District of Georgia.
Ohlson has served as Chief of Staff and Counselor to the Attorney General since February 2009. He has previously served as the Director of the Executive Office for Immigration Review, chief of staff to the Deputy Attorney General, and Assistant U.S. Attorney. A former officer in the U.S. Army where he served as both a judge advocate and as a paratrooper, in 1990 he was awarded the Bronze Star for his service during the Persian Gulf War.
Thursday 30 December 2010
Detroit Medical Center Pays U.S. $30 Million to Settle False Claims Act AllegationsRead the Press Release
WASHINGTON – Detroit Medical Center, a non-profit company that owns and operates hospitals and outpatient facilities in Detroit, has agreed to pay the United States $30 million to settle allegations that it violated the False Claims Act, the Anti-Kickback Statute and the Stark Statute, by engaging in improper financial relationships with referring physicians, the Justice Department announced today.
The Stark Statute and the Anti-Kickback Statute restrict the financial relationships that hospitals may have with doctors who refer patients to them. Most of the relationships at issue in this matter involved office lease agreements and independent contractor relationships that were either inconsistent with fair market value or not memorialized in writing.
"Improper financial relationships between health care providers and their referral sources can corrupt a physician's judgment about the patient's true healthcare needs," said Tony West, Assistant Attorney General for the Department’s Civil Division. "In addition to yielding a substantial recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable for patients."
The government learned of the statutory violations from Detroit Medical Center, itself, which discovered improper financial relationships with a number of physicians as it prepared for the sale to Vanguard. "We applaud the hospital leadership’s decision to come forward voluntarily to disclose these issues to the government," said U.S. Attorney Barbara McQuade.
Detroit Medical Center is in the process of selling its facilities to Vanguard Health Systems Inc., a company headquartered in Nashville, Tenn., that owns and operates healthcare facilities in five states. Vanguard also signed today’s settlement.
The case was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Michigan, the Office of Inspector General of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services.
Wednesday 29 December 2010
Justice Department Settles Allegations of Immigration-Related Unfair Employment Practices in Oregon and North CarolinaRead the Press Release
WASHINGTON – The Justice Department today announced that it has reached a settlement agreement with Collins Management Corporation, a forestry products company in Oregon, to resolve allegations that it unlawfully fired and later refused to rehire a lawful permanent resident in violation of the anti-discrimination provision of the Immigration and Nationality Act (INA).
According to the department’s findings, Collins insisted that a lawful permanent resident present an unexpired permanent resident card (also known as a "green card") for Form I-9 purposes, even though the individual had already presented his driver’s license and unrestricted Social Security card to the employer. The department further found that the company fired the individual when he was unable to present an unexpired green card and refused to consider him for re-hire two months later because the company believed he did not possess proper documentation.
As part of the settlement agreement, Collins agreed to pay $15,000 in back pay to the former employee and a $600 civil penalty to the federal government. The company also agreed to train its managers and human resources representatives regarding compliance with the anti-discrimination provision of the INA.
In addition, earlier this month, the department entered into a settlement agreement with Oakwood Healthcare Inc. to settle allegations that its Ashville, N.C., facility unlawfully discriminated against a lawful permanent resident by rejecting her employment eligibility verification documents and rescinding an offer of employment. As part of the settlement, Oakwood agreed to compensate the individual for lost wages totaling $732, pay a $1,100 civil penalty and train its human resources employees regarding compliance with the anti-discrimination provision.
"The INA’s anti-discrimination provision protects all authorized workers from unfair documentary requests during the Form I-9 process," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Justice Department is committed to stopping workplace discrimination against citizens and work-authorized non-citizens alike."
The Office of Special Counsel (OSC) for Immigration-Related Unfair Employment Practices is responsible for enforcing the INA anti-discrimination provision. For more information about protections against employment discrimination under federal immigration law, call 1-800-255-7688 (OSC’s worker hotline) (1-800-237-2525, TDD for hearing impaired); 1-800-255-8255 (OSC’s employer hotline) (1-800-362-2735, TDD for hearing impaired); 202-616-5594; email [email protected]; or visit www.usdoj/gov/crt/osc .
Monday 27 December 2010
Justice Department Settles Disability Discrimination Case Against Property Management Company for $1.25 MillionRead the Press Release
WASHINGTON – The Justice Department today announced a $1.25 million agreement with Warren Properties Inc., Warren Village (Mobile) Limited Partnership and Frank R. Warren to settle allegations that the defendants violated the Fair Housing Act by refusing to grant a tenant’s requests for a reasonable accommodation. This settlement is the largest ever obtained by the department in an individual housing discrimination case.
The lawsuit, filed on April 29, 2009, in the U.S. District Court for the Southern District of Alabama, alleges that the defendants failed to permit a tenant with a mobility impairment to move to a ground-floor apartment near the front of the building in a 196-unit apartment complex in Mobile, Ala., owned by Warren Village (Mobile) Limited Partnership. The suit also alleges that the tenant suffered severe injuries as a result of falling down the stairs.
Under the consent decree, the defendants must pay $1,195,000 to compensate the tenant, along with an additional $55,000 in fees and costs to the government. The defendants must hire a reasonable accommodation facilitator to handle requests for reasonable accommodations from more than 11,000 housing units in 85 properties managed by Warren Properties Inc. in 15 states. The defendants must also attend fair housing training, implement a non-discrimination policy, and comply with notice, monitoring and reporting requirements.
“Property owners and managers have no excuse for violating our nation’s fair housing laws by refusing to accommodate people with disabilities,” said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. “Equal access to housing in the United States is a fundamental right, and this nation will not tolerate discrimination in housing.”
Kenyen R. Brown, U.S. Attorney for the Southern District of Alabama, stated, “This is the second major settlement of a housing discrimination case engineered by our office in the last year. We will continue to make civil rights and housing litigation a major priority of this office.”
“Persons with disabilities have a right to the reasonable accommodations they need to function and live as others do,” said John Trasviña, Department of Housing and Urban Development(HUD) Assistant Secretary for Fair Housing and Equal Opportunity. “Denying them that right violates the Fair Housing Act and HUD and the Department of Justice are committed to ensuring that property owners meet their responsibility to comply with the law.”
The lawsuit arose as a result of a complaint filed by the tenant with HUD. After an investigation of the complaint, HUD issued a charge of discrimination and the complainant elected to have the case heard in federal court. This case was litigated primarily by Assistant U.S. Attorneys Gary Moore and Deidre Colson, and Paralegal Specialist Regina Dickerson in the U.S. Attorney’s Office in Mobile with assistance from Elizabeth Singer, Director of the U.S. Attorneys’ Fair Housing Program in the Civil Rights Division’s Housing and Civil Enforcement Section in Washington, D.C.
Fighting illegal housing discrimination is a top priority of the Justice Department. The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability.
More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt/. Persons who believe they have experienced or witnessed unlawful housing discrimination may call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact HUD at 1-800-669-9777. More information about the Fair Housing Act can also be found at www.justice.gov/crt/housing or www.hud.gov/fairhousing.
Alcatel-Lucent S.A. and Three Subsidiaries Agree to Pay $92 Million to Resolve Foreign Corrupt Practices Act InvestigationRead the Press Release
WASHINGTON – Alcatel-Lucent S.A. and three of its subsidiaries have agreed to pay a combined $92 million penalty to resolve a Foreign Corrupt Practices Act (FCPA) investigation into the worldwide sales practices of Alcatel S.A. prior to its 2006 merger with Lucent Technologies Inc., the Department of Justice announced.
As part of the agreed resolution, the department today filed a criminal information in U.S. District Court for the Southern District of Florida charging Alcatel-Lucent with one count of violating the internal control provisions of the FCPA, and one count of violating the books and records provisions of the FCPA. The department and Alcatel-Lucent agreed to resolve the charges by entering into a deferred prosecution agreement for a term of three years.
The department also filed a criminal information charging three subsidiaries: Alcatel-Lucent France S.A., formerly known as Alcatel CIT S.A.; Alcatel-Lucent Trade International A.G., formerly known as Alcatel Standard A.G.; and Alcatel Centroamerica S.A., formerly known as Alcatel de Costa Rica S.A. The three subsidiaries were each charged with conspiring to violate the anti-bribery, books and records, and internal controls provisions of the FCPA. Each of the three subsidiaries has agreed to plead guilty to the charges.
"Foreign bribery weakens economic development, erodes confidence in the marketplace and distorts competition," said Mythili Raman, Principal Deputy Assistant Attorney General of the Criminal Division. "The resolutions announced today and our related prosecutions of corporate executives demonstrate our sustained commitment to combating such conduct wherever we find it."
In addition to the $92 million penalty, Alcatel-Lucent and its three subsidiaries agreed to implement rigorous compliance enhancements. Alcatel-Lucent also agreed to retain an independent compliance monitor for a three-year period to oversee the company’s implementation and maintenance of an enhanced FCPA compliance program and to submit yearly reports to the Department of Justice. The charging documents and penalty reflect, among other things, that there was limited and inadequate cooperation by the company for a substantial period of time, but that after the merger, Alcatel-Lucent substantially improved its cooperation with the department’s investigation. In addition, the charging documents also credit Alcatel-Lucent for, on its own initiative and at a substantial financial cost, making an unprecedented pledge to stop using third-party sales and marketing agents in conducting its worldwide business.
According to court documents, Alcatel-Lucent was formed in late 2006 after Lucent Technologies merged with Alcatel, a French telecommunications equipment and services company. Starting in the 1990s and continuing through late 2006, Alcatel pursued many of its business opportunities around the world through subsidiaries like Alcatel CIT and Alcatel de Costa Rica using third-party agents and consultants who were retained by Alcatel Standard. This business model was shown to be prone to corruption, as consultants were repeatedly used as conduits for bribe payments to foreign officials and business executives of private customers to obtain or retain business in many countries.
Alcatel-Lucent’s three subsidiaries paid millions of dollars in improper payments to foreign officials for the purpose of obtaining and retaining business in Costa Rica, Honduras, Malaysia and Taiwan. In addition to the improper payments, Alcatel-Lucent also admitted that it violated the internal controls and books and records provisions of the FCPA related to the hiring of third-party agents in Kenya, Nigeria, Bangladesh, Ecuador, Nicaragua, Angola, Ivory Coast, Uganda and Mali. Overall, Alcatel-Lucent admitted that the company earned approximately $48.1 million in profits as a result of these improper payments.
Specifically, Alcatel CIT won three contracts in Costa Rica worth a combined total of more than $300 million as a result of corrupt payments to government officials and from which Alcatel reaped a profit of more than $23 million, according to court documents. Alcatel CIT wired more than $18 million to two consultants in Costa Rica, which had been retained by Alcatel Standard, in connection with obtaining business in that country. According to court documents, more than half of this money was then passed on by the consultants to various Costa Rican government officials for assisting Alcatel CIT and Alcatel de Costa Rica in obtaining and retaining business. As part of the scheme, the consultants created phony invoices that they then submitted to Alcatel CIT. According to court documents, senior Alcatel executives approved the retention of and payments to the consultants despite obvious indications that the consultants were performing little or no legitimate work.
In addition, according to court documents, Alcatel Standard hired a consultant in Honduras who was a perfume distributor with no experience in telecommunications. The consultant was retained after being personally selected by the brother of a senior Honduran government official. Alcatel CIT executives knew that a significant portion of the money paid to the consultant would be paid to the family of the senior Honduran government official in exchange for favorable treatment of Alcatel CIT. As a result of these payments, Alcatel CIT was able to retain contracts worth approximately $47 million and from which Alcatel earned $870,000.
In addition, according to court documents, Alcatel Standard retained two consultants on behalf of another Alcatel subsidiary in Taiwan to assist in obtaining an axle counting contract worth approximately $19.2 million. Alcatel and its joint venture paid these two consultants more than $950,000 despite the fact that neither consultant had telecommunications experience. In fact, according to court documents, Alcatel Standard’s purpose for hiring the consultants was so that Alcatel SEL could funnel payments through the consultants to Taiwanese legislators who had influence in the award of the contract. Alcatel earned approximately $4.34 million from this contract.
In a related case, two former Alcatel executives, Christian Sapsizian, a French citizen and Alcatel CIT executive, and Edgar Valverde Acosta, a Costa Rican citizen and president of Alcatel de Costa Rica, were charged in March 2007 with conspiring to violate the FCPA, making corrupt payments in violation of the FCPA, and laundering the bribe payments through a third-party. Sapsizian was arrested in Miami in late 2006 and pleaded guilty on June 6, 2007, to FCPA violations. He was sentenced on Sept. 23, 2008, in the U.S. District Court for the Southern District of Florida to 30 months in prison. Sapsizian admitted that from February 2000 through September 2004, he conspired with Valverde and others to make millions of dollars in bribe payments to Costa Rican officials in order to obtain a telecommunications contract on behalf of Alcatel. Valverde remains a fugitive, and is considered innocent until proven guilty in a court of law.
In a related matter, the U.S. Securities and Exchange Commission (SEC) reached a settlement filed today in which Alcatel-Lucent consented to the entry of a permanent injunction against FCPA violations and agreed to pay $45,372,000 in disgorgement and prejudgment interest. Alcatel-Lucent also agreed with the SEC to comply with certain undertakings regarding its FCPA compliance program.
In January 2010, Alcatel-Lucent also agreed to pay $10 million to settle a corruption case brought by the government of Costa Rica arising out of the bribery of Costa Rican officials by the company. The settlement marked the first time in Costa Rica’s history that a foreign corporation agreed to pay the government damages for corruption.
The case is being prosecuted by Deputy Chief Charles E. Duross and Trial Attorney Andrew Gentin of the Criminal Division’s Fraud Section. The department also acknowledges the significant contributions to this investigation by Assistant U.S. Attorney Mary K. Dimke, formerly of the Fraud Section. Significant assistance was provided by the SEC’s Miami Regional Office, the Criminal Division’s Office of International Affairs, the U.S. Attorney’s Office for the Southern District of Florida, the FBI, U.S. Immigration and Customs Enforcement, the Office of the Attorney General in Costa Rica, the Fiscalia de Delitos Economicos, Corrupcion y Tributarios in Costa Rica, the French Ministry of Justice, the Tribunal de Grande Instance de Paris, and Service Central de Prévention de la Corruption.
Thursday 23 December 2010
Moses Lake Settlement Funds Cleanup and Ends LitigationRead the Press Release
WASHINGTON— Parties responsible for contamination at the Moses Lake Wellfield Superfund Site have reached a settlement that provides the funding necessary to clean up the site. Cleanup of TCE (trichloroethylene), an industrial solvent, and other contaminants was initiated by the U.S. Army Corps of Engineers and will be completed by the Environmental Protection Agency (EPA). Under the consent decree lodged today in federal district court in Yakima, Wash., the federal government has pledged to provide an estimated $55 million in cleanup funds. Other cleanup funding, in the amount of $3.25 million, will be provided by The Boeing Company, Lockheed Martin and the city of Moses Lake.
"This settlement will ensure the cleanup of TCE from groundwater at the Moses Lake Superfund Site." said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. "The Justice Department expects those responsible for pollution to pay for cleanup. This settlement shows the federal government’s willingness to live up to that standard when it is responsible for pollution."
The settlement will fund the cleanup actions selected by EPA in September 2008. "EPA’s cleanup will ensure that residents in and around the city of Moses Lake are protected from contaminants in the groundwater," said Dan Opalski, Director of EPA’s Office of Environmental Cleanup for Washington, Oregon, Idaho and Alaska.
"Our state’s strong partnership with the Department of Justice means that a large area of contamination will, at long last, be cleaned up," said Washington Attorney General Robert M. McKenna. "Our office is proud to provide the legal work that plays a critical role in improving the quality of natural resources in the state of Washington."
"We are pleased to be part of this agreement, and we look forward to working with EPA to clean up groundwater on this site," said Jim Pendowski, the Washington Department of Ecology’s Toxics Cleanup Program manager.
The settlement resolves a lawsuit brought by the city of Moses Lake as well as potential lawsuits by the federal government and the state of Washington.
The consent decree, lodged in the U.S. District Court for the Eastern District of Washington, is subject to a 30-day public comment period and approval by the federal court. A copy of the consent decree is available on the Justice Department Web site at http://www.justice.gov/enrd/Consent_Decrees.html.
Former Bell, California, Police Officer Sentenced to Nine Years on Federal Civil Rights Charge for Sexual AssaultRead the Press Release
WASHINGTON – A judge sentenced Feliciano Sanchez, a former officer with the Bell, Calif., Police Department, to nine years in federal prison and three years of supervised release for sexually assaulting a female motorist and violating her civil rights, the Justice Department announced.
Sanchez, 35, of Pico Rivera, Calif., pleaded guilty last year to violating the female victim’s civil rights when he forced her to perform oral sex after stopping her for a traffic violation. Sanchez admitted in court that on May 16, 2007, he took the victim in his patrol car to an isolated parking lot away from the traffic stop. During the assault, Sanchez placed his hand on his duty weapon and forced the victim to perform the sex act.
According to evidence presented in court and in documents filed by prosecutors, Sanchez forced the victim to commit the sex act while armed and in his full police uniform. After the incident, Sanchez twice went to the victim’s workplace to tell her that he would be watching her, which caused her to quit her job.
"These actions not only brutalized the victim, but undermined the public’s trust in its law enforcement officers," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "The Department will aggressively prosecute law enforcement officers who violate the rights of the people they have sworn to protect and disregard the laws they have pledged to uphold."
“This former police officer violated his oath to serve and protect the community by committing a crime that was particularly offensive, dehumanizing and harmful,” said U.S. Attorney André Birotte Jr. “In this case, Mr. Sanchez committed an egregious assault, caused incalculable pain and suffering to the victim, and damaged the honor of the thousands of men and women in law enforcement who serve us every day.”
This case was investigated by agents from the FBI’s Los Angeles Field Office. The case was prosecuted by former Assistant U.S. Attorney Tammy Spertus of the U.S. Attorney’s Office for the Central District of California, and Trial Attorney Karen Ruckert Lopez and former Trial Attorney Christine Dunn of the Justice Department’s Civil Rights Division.
Beacon, New York, Police Department Enters into Agreement with the United States to Reform Its Policies and PracticesRead the Press Release
NEW YORK – The Justice Department announced today an agreement with the Beacon, N.Y., Police Department (BPD) to resolve the department’s investigation of the BPD, in accordance with the Violent Crime Control and Law Enforcement Act of 1994. That law authorizes the attorney general to file suit to reform police departments that may be engaging in a pattern or practice of violating citizens’ federal rights.
"Communities must be able to trust their police departments to protect and promote public safety," said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. "This agreement will ensure that residents of Beacon can feel confident that their police department will always act in their best interest and will improve the department’s operations that will protect the community."
"We are pleased that the Beacon Police Department has concluded a cooperative effort to improve its policies and procedures regarding use of force, review of officer conduct and citizen complaints so that they may better protect all of the people of Beacon," said U.S. Attorney for the Southern District Preet Bharara. "We will continue to monitor and enforce the civil rights laws."
Today’s agreement concludes the investigation without any finding that the BPD violated the law, but implements a series of reforms and improvements designed to improve the operation of the BPD. On June 21, 2005, and Nov. 14, 2008, the department’s Civil Rights Division Special Litigation Section and the U.S. Attorney’s Office issued technical assistance letters to the BPD. The agreement, signed today by the department, implements those recommendations. Under the terms of the agreement finalized today, the BPD has agreed to, among other things:
- Revise its use of force policy to emphasize verbal de-escalation techniques, and specifically prohibit the use of the carotid hold absent exigent circumstances;
- Specifically limit the type of ammunition allowed and mandate the exact amount of ammunition officers must carry;
- Revise its OC spray policies to ensure that OC spray is appropriately used and that all uses are reported;
- Revise its policies requiring the review and/or investigation of all uses of force, beyond unresisted handcuffing, to be consistent as to the requirements for investigation and review of uses of force;
- Develop standards for its vehicle pursuit/roadblock policy to clarify the circumstances in which pursuits should be authorized;
- Implement a formal, structured, and consistent system for handling complaints from members of the public;
- Create a policy development committee and, where appropriate, seek input from the community on new policies; and
- Develop a risk assessment and management system that will examine and review officer conduct on a regular basis as a proactive measure to minimize and detect misconduct, and to identify training and policy issues.
The agreement will remain in place for two years, provided that the parties agree that the BPD has maintained substantial compliance with its terms.
The relevant provision of the Violent Crime Control and Law Enforcement Act of 1994, known by its statutory provision as "Section 14141," requires the Department of Justice to focus on systemic problems in police departments rather than individual, isolated problems. The department may enforce the statute through the filing of a federal court complaint or, as here, by voluntary compliance agreement.
Special Litigation Section Trial Attorney Cathleen Trainor and Assistant U.S. Attorney David J. Kennedy of the Southern District of New York are handling the case.
Attorney General Eric Holder Welcomes Drug Enforcement Administrator and U.S. Marshals Service DirectorRead the Press Release
WASHINGTON – Attorney General Eric Holder welcomed the confirmation of the new Director of the U.S. Marshals Service (USMS), Stacia A. Hylton, and Administrator of the Drug Enforcement Administration (DEA), Michele M. Leonhart. Hylton and Leonhart were confirmed yesterday by the U.S. Senate.
“These two highly experienced individuals will help lead the department with dedication, sound judgment and integrity,” said Attorney General Holder. “I am pleased that Stacia Hylton will return to the U.S. Marshals Service to build upon 29 years of distinguished service at the department. With more than 30 years of exemplary service at the Department of Justice, I look forward to continuing to work with Michele Leonhart in her new role at the DEA.”
The mission of the USMS is to enforce federal laws and provide support to virtually all elements of the federal justice system by providing for the security of federal court facilities and the safety of judges and other court personnel; apprehending criminals; exercising custody of federal prisoners and providing for their security and transportation to correctional facilities; executing federal court orders; seizing assets gained by illegal means and providing for the custody, management and disposal of forfeited assets; assuring the safety of endangered government witnesses and their families; and collecting and disbursing funds.
Stacia A. Hylton will return to USMS after operating her own consulting company, Hylton Kirk & Associates. Hylton has a long history with the Department of Justice, having served in federal law enforcement within the department for 29 years. Previously, she served as the Federal Detention Trustee from 2004-2010. Prior to that, she served in a number of leadership positions within USMS from 1980-2004, including Acting Deputy Director, Assistant Director of Prisoner Operations, Chief Deputy in the District of South Carolina and Chief of Judicial Security Programs.
She is a recipient of the Attorney General’s Edmund J. Randolph Award and the Presidential Rank Award for Distinguished Service. Hylton attended Northeastern University where she earned her Bachelor’s of Science degree in Criminal Justice in 1983.
The mission of the DEA is to enforce the controlled substances laws and regulations of the United States. Using the agency’s unique operational and intelligence capabilities, DEA successfully identifies, investigates, disrupts, and dismantles major drug trafficking organizations around the globe.
Michele Leonhart has more than 30 years of law enforcement experience. She is the first female DEA Special Agent to rise through the ranks of the agency to become its Administrator, and only the second woman to lead the agency. She was unanimously confirmed by the Senate on March 8, 2004, to serve as DEA Deputy Administrator and became the Acting Administrator in 2007.
Throughout her career at the department, Special Agent Leonhart served in senior management roles in DEA headquarters as well as Field Divisions across the United States. She first joined the DEA in 1980 as a Special Agent in Minneapolis and St. Louis until promoted to DEA’s supervisory ranks in San Diego in 1988. She became the first woman to lead a DEA field division as a Special Agent-in-Charge when she directed the DEA’s San Francisco Field Division in 1997, and later commanded DEA’s Los Angeles Field Division. Prior to becoming a DEA Special Agent, she was a police officer with the Baltimore Police Department.
Attorney General Eric Holder Announces Acting Director for the Executive Office for Immigration ReviewRead the Press Release
WASHINGTON – Attorney General Eric Holder today announced the appointment of Juan Osuna as Acting Director for the Executive Office for Immigration Review (EOIR).
“Juan has been with the department for more than a decade and has developed an extensive knowledge of immigration litigation, and earned a reputation as a diligent and thoughtful advocate and manager,” said Attorney General Holder. “I am confident he will lead the office with the highest standards of professionalism, integrity and dedication.”
The Executive Office for Immigration Review (EOIR) was created on Jan. 9, 1983, through an internal department reorganization which combined the Board of Immigration Appeals (BIA) with the Immigration Judge function previously performed by the former Immigration and Naturalization Service (INS) (now part of the Department of Homeland Security). The Office of the Chief Administrative Hearing Officer (OCAHO) was added in 1987.
EOIR is headed by a Director who is responsible for the supervision of the Chairman of the Board of Immigration Appeals (BIA), the Chief Immigration Judge, the Chief Administrative Hearing Officer and all agency personnel.
Since earlier this year, Osuna has worked as an Associate Deputy Attorney General working on immigration policy, Indian country matters, pardons and commutations, and other issues. Prior to that, he worked in the department’s Civil Division, where, in addition to handling immigration policy, he also oversaw civil immigration-related litigation in the federal courts. Previously he served as chairman of the BIA, where he managed the highest administrative tribunal on immigration matters in the United States, comprised of 250 employees, including 15 Board Members, 135 attorneys and support personnel. He was first appointed to the BIA in 2000 and became the chairman in 2008.
While at the BIA, Osuna put in place a number of reforms and oversaw the Attorney General’s 2006 reform plan, which increased the quality and transparency of the Board’s decisions, and he adjudicated hundreds of appeals from decisions of Immigration Judges made in removal proceedings.
Osuna also teaches immigration policy at George Mason University School of Law in Arlington, Va.
Osuna received a B.A. from George Washington University, a law degree from American University’s Washington College of Law and a master’s degree in law and international affairs from American University’s School of International Service.
Attorney General Announces Appointment of Robin C. Ashton as Head of the Office of Professional ResponsibilityRead the Press Release
WASHINGTON — Attorney General Eric Holder today announced the appointment of Robin C. Ashton to serve as head of the Office of Professional Responsibility (OPR) at the Department of Justice.
“As a veteran career prosecutor, Robin is uniquely qualified to serve as Counsel for Professional Responsibility, and I am confident she will lead the office with the highest standards of professionalism, integrity and dedication,” said Attorney General Holder.
The Office of Professional Responsibility is responsible for investigating allegations of professional misconduct involving department attorneys.
Ashton has worked in the U.S. Attorney’s Office for the District of Columbia since 1991, serving most recently as the Executive Assistant U.S. Attorney for Management where she managed and directed the oversight of significant civil and criminal cases and special operations.
She served as Deputy Director in the Executive Office for U.S. Attorneys (EOUSA) at the department from 2001 to 2005, where she worked closely with the 94 U.S. Attorneys’ Offices and provided oversight of the litigation divisions and operational components.
Prior to joining EOUSA, Ashton served as an Assistant U.S. Attorney in the U.S. Attorney’s Office for the District of Columbia for over a decade where she handled numerous complex appeals in the D.C. Circuit and the D.C. Court of Appeals, prosecuted over 50 felony jury trials and supervised hundreds of grand jury investigations. Ashton began her career at the department in the litigation section of the Antitrust Division.
She was awarded both the Attorney General’s Award for Outstanding Leadership in Management and the United States Attorney’s Award for Meritorious Service in 2010, and EOUSA’s Director’s Award for Executive Achievement in 2004.
Ashton received her B.A. in English from the University of Michigan and her J.D. from the College of William and Mary, Marshall-Wythe School of Law.
Wednesday 22 December 2010
U.S. Clean Water Act Settlement in Northeast Ohio to Protect Lake Erie, Revitalize Neighborhoods and Create Green JobsRead the Press Release
WASHINGTON – A comprehensive Clean Water Act settlement with the Northeast Ohio Regional Sewer District (NEORSD) will address the flow of untreated sewage into Cleveland area waterways and Lake Erie, the Justice Department and the U.S. Environmental Protection Agency (EPA) announced today. The settlement will safeguard water quality and protect human health by capturing and treating more than 98 percent of wet weather flows entering the combined sewer system, which services the city of Cleveland and 59 adjoining communities.
"We are pleased that NEORSD has decided through this consent decree to take the steps necessary to dramatically reduce its overflows in order to attain compliance with the Clean Water Act," said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resource Division of the Department of Justice. "This settlement – which incorporates green infrastructure, major combined sewer overflow control measures, increases in treatment plant capacity, and the possibility of transforming vacant brownfields located in minority and low income residential areas into valuable community assets – will be a model for the future."
"Today’s landmark settlement will advance environmental justice and revitalize Cleveland communities by investing in green infrastructure," said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. "This commitment will not only protect human health and the environment, it will ensure that Cleveland residents are protected from raw sewage and have access to clean water, beaches and communities."
NEORSD discharges nearly five billion gallons of untreated, raw sewage approximately 3,000 to 4,000 times per year into Lake Erie and nearby rivers. Today’s settlement will require NEORSD to spend approximately $3 billion to install pollution controls, including the construction of seven tunnel systems ranging from two to five miles in length that will reduce the discharges of untreated, raw sewage to approximately 537 million gallons per year.
"This approach will provide the opportunity for the Northeast Ohio Regional Sewer District to use this settlement to leverage and strengthen partnerships with community land banks to utilize brownfields and vacant properties for green water infrastructure," said Mathy Stanislaus, EPA’s OSWER Assistant Administrator. "This will revitalize adjacent neighborhoods and communities and residents will benefit from the transformation of these under utilized lands into new community assets."
Today’s settlement will also significantly advance the use of large scale green infrastructure projects to control wet weather sewer discharges by requiring NEORSD to invest at least $42 million in green infrastructure projects. These projects will capture an additional 44 million gallons of wet weather flow beyond what the tunnels and other traditional infrastructure construction improvements will capture. Green infrastructure involves the use of properties to store, infiltrate, and evaporate stormwater to prevent it from getting into the combined sewer system. Examples of potential green infrastructure projects include wetlands, troughs, cisterns, or other formations to store water, and rain gardens, urban croplands, and permeable pavement to allow for greater infiltration of water into the ground.
The settlement will also provide NEORSD with the opportunity to propose larger uses of green infrastructure in exchange for reductions in the scope of traditional infrastructure projects. NEORSD would have the potential to use legal and financial mechanisms such as the Cleveland and Cuyahoga County land banks to transform the area’s numerous vacant or abandoned properties to productive use -- helping to revitalize disadvantaged communities and resulting in cleaner air and green space. NEORSD will collaborate with local community groups, including those representing minority and/or low-income neighborhoods in selecting the locations and types of green infrastructure projects to propose. These pioneering green infrastructure portions of the settlement will further the Department of Justice and EPA’s work to advance environmental justice.
In addition to installing controls and investing in green infrastructure, NEORSD will spend $1 million to operate a hazardous waste collection center. The center will provide communities in Cuyahoga County with a permanent location to drop off household hazardous waste. The collection center is expected to collect and dispose of one million pounds of hazardous waste per year. NEORSD will also spend approximately $800,000 to improve other water resources.
Today’s settlement also requires the district to pay a penalty of $1.2 million which will be distributed evenly between the United States and the State of Ohio. The settlement, lodged in the U.S. District Court for the Northern District of Ohio, is subject to a 30-day public comment period and final court approval.
A copy of the consent decree lodged today is available on the Department of Justice website at www.justice.gov/enrd/Consent_Decrees.html. More information on the settlement: www.epa.gov/compliance/resources/cases/civil/cwa/neorsd.htmlToday’s settlement is the latest in a series of Clean Water Act settlements that will reduce the discharge of raw sewage and contaminated stormwater into United States’ rivers, streams and lakes. Raw sewage contains pathogens that threaten public health, leading to beach closures and public advisories against fishing and swimming. This problem particularly affects older urban areas, where minority and low-income communities are often concentrated. Keeping raw sewage and contaminated stormwater out of the waters of the United States is one of EPA’s National Enforcement Initiatives for 2011to 2013. The Initiative will focus on reducing discharges from sewer overflows by obtaining cities’ commitments to implement timely, affordable solutions to these problems, including the increased use of green infrastructure and other innovative approaches.
Justice Department Sues to Shut Down Chicago Tax Return PreparerRead the Press Release
WASHINGTON – The United States has sued a Chicago tax return preparer to bar her from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction suit filed in the Northern District of Illinois alleges that Martha A. Jones claims bogus tax deductions on her customers’ federal income tax returns. Jones allegedly includes deductions for fabricated charitable contributions, employee business expenses and other items. According to the government complaint, the Internal Revenue Service examined 56 of the returns that Jones prepared for tax years between 2005 and 2008 and found that all of them contained inaccuracies. The complaint also alleges that Jones fails to sign her customers’ returns and has continued to do so even after being advised that she is legally required to sign the tax returns that she prepares.
The complaint estimates that the tax losses to the United States from Jones’s misconduct could exceed $1 million.
In the past 10 years, the Justice Department’s Tax Division has obtained injunctions against hundreds of tax-return preparers and tax fraud promoters. Information about these cases is available on the Justice Department website.
Georgia Hospital Pays U.S. $13.9 Million to Resolve Medicaid False Claims Act AllegationsRead the Press Release
WASHINGTON – John D. Archbold Memorial Hospital Inc. has paid the United States a total of $13.9 million to settle allegations that the hospital submitted false claims to the state of Georgia’s Medicaid program, the Justice Department announced today.
The settlement resolves allegations that between November 2002 and July 2008, the Thomasville, Ga.-hospital made false representations to the Georgia Department of Community Health, the state agency that administers the Medicaid program in Georgia, that it was a public hospital for Medicaid purposes in order to increase the amount of Medicaid funds provided to the hospital. Under Medicaid rules, only public hospitals may participate in the Medicaid Upper Payment Limit (UPL) program. In addition, public hospitals receive additional Disproportionate Share Hospital (DSH) program funds that are not available to private hospitals. Contrary to its certification to the Georgia Department of Community Health, Archbold Memorial was in fact a private hospital, and as a result received millions of dollars in UPL and DSH funds to which it was not entitled.
"We are committed to protecting the integrity of the Medicaid program and ensuring that health care providers do not game the system to the detriment of the poor, disabled, and young people served by this important program," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice.
"The U.S. Attorney’s Office will continue to use the False Claims Act to protect programs like Medicaid, which rely on the honesty and accuracy of information provided by program providers to determine the amount of money paid by the United States," said Sally Quillian Yates, U.S. Attorney for the Northern District of Georgia in Atlanta. "Any false statements made in order to increase the amount of money the federal government spends to provide health care to its beneficiaries will be ferreted out and the funds recovered."
The civil settlement resolves a lawsuit filed in federal court in the Northern District of Georgia under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the United States and share in any recovery. As part of today’s resolution, the whistleblower – Wesley Simms, M.D.– will receive $695,151 from the settlement amount.
This settlement is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 now approach $6.8 billion.
The settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Northern District of Georgia, the Commercial Litigation Branch of the Justice Department’s Civil Division, and the Department of Health and Human Services’ Office of Inspector General and Office of Counsel to the Inspector General.
Former UBS Banker Pleads Guilty to Helping American Client Conceal Assets OffshoreRead the Press Release
WASHINGTON - Renzo Gadola, 44, has pleaded guilty to conspiring to defraud the United States, the Justice Department announced today. Gadola, a former UBS banker, was arrested in Miami after meeting with a client at a Miami hotel and attempting to persuade that client to not disclose to the United States that the client owned and controlled a bank account at Basler Kantonalbank, a regional bank headquartered in Basel, Switzerland. Gadola is scheduled to be sentenced on March 10, 2011, by U.S. District Judge James L. King. He faces a maximum of five years in prison.
According to court documents, Gadola, a citizen and resident of Switzerland, was a registered investment advisor with the U.S. Securities and Exchange Commission (SEC). From approximately 1995 through August of 2008, Gadola was employed as a private banker by UBS AG, Switzerland’s largest bank. In February 2009, Gadola began working in Switzerland as an independent investment advisor, doing business under the name RG Investment Partner AG.
According to court documents, Gadola worked closely with a fellow former UBS banker who was not registered with the SEC and who had indicated that he was afraid of traveling to the United States for fear of being arrested because of his cross-border banking activities. Hence, the two arranged that Gadola would travel to the United States and meet with the clients to discuss their investments in undeclared accounts.
According to court documents, on Nov. 6, 2010, Gadola met with a client in a Miami hotel. The meeting was recorded. This client owned and controlled an undeclared account at Basler Kantonalbank. The undeclared account was funded when the client provided Gadola’s partner, the former UBS banker, with approximately $445,000 in cash. The client gave the cash to Gadola’s partner during two meetings at a hotel in New Orleans.
According to court documents, during the Nov. 6, 2010, meeting, Gadola attempted to persuade the client to not disclose the Basler Kantonalbank account to United States authorities. Gadola told the client that there was a "99.9 %" chance the client had nothing to worry about because the "likelihood . . .that they will somehow. . . find out about the account is practically zero percent." Further, Gadola told the client that there was no "paper trail" associated with the undeclared account.
Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida, Acting Assistant Attorney General for the Tax Division John DiCicco, and IRS Special Agent in Charge Daniel W. Auer commended the investigative efforts of the IRS agents involved in this case, as well as Senior Litigation Counsel Kevin M. Downing, Trial Attorney Mark F. Daly, Trial Attorney Michelle M. Petersen of the Tax Division, and Assistant U.S. Attorney Jeffrey A. Neiman, who are prosecuting the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.justice.gov/tax/ .
Tuesday 21 December 2010
Outlaws Motorcycle Gang Members Found GuiltyRead the Press Release
WASHINGTON – The national president and three members of the American Outlaw Association (Outlaws) motorcycle gang have been found guilty of participating in a violent criminal organization by a federal jury in the Eastern District of Virginia.
U.S. Attorney Neil H. MacBride of the Eastern District of Virginia; Assistant Attorney General Lanny A. Breuer of the Criminal Division; and Edgar A. Domenech, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives’ (ATF) Washington Field Division announced the verdict after it was accepted by U.S. District Judge Henry E. Hudson.
“Today’s conviction of the Outlaw’s national president strikes a crippling blow to his violent motorcycle gang,” said U.S. Attorney MacBride. “Riding a Harley doesn’t make you a criminal – but you cross the line when your motorcycle gang engages in violent criminal activity as a way of doing business. Virginia is a safe place today because ATF agents put their lives on the line to bring this case. Thanks to their sacrifice, the leadership of this gang has been brought to justice, along with the enforcers who carried out his orders.”
“Today, a Virginia jury struck back against the violence that the Outlaws motorcycle gang has been spreading in our communities,” said Assistant Attorney General Breuer. “In obtaining convictions against the gang’s national president and other members, the Justice Department is sending a strong message to organized criminal enterprises of all stripes that we will not allow them to operate without repercussion. We are committed to bringing significant prosecutions against the leaders of the country’s most notorious and violent groups.”
“This investigation would not have been a success without the dedicated and hard working agents and prosecutors that devoted several years to this undercover operation,” said ATF Special Agent in Charge Edgar Domenech. “This is another example of how our agents work day in and day out to build cases against violent criminals.”
Today, the jury found Jack Rosga, aka “Milwaukee Jack,” 53, guilty of conspiring to engage in racketeering activities and conspiring to commit violence in aid of racketeering. Rosga is the national president of the Outlaws organization and is also a member of the Gold Region, Milwaukee Chapter. He faces a maximum of 20 years in prison for the racketeering charge and a maximum of three years in prison for the violence charge.
The other members of the Outlaws who were convicted today include:
- Mark Jason Fiel, aka “Jason,” 37, a former Outlaws member in the Copper Region and a former leader in the Manassas/Shenandoah Valley Chapter. Fiel was convicted of conspiring to engage in racketeering activities and conspiring to commit violence in aid of racketeering.
- Harry Rhyne McCall, 53, an Outlaws member in the Copper Region, Lexington, N.C., Chapter. McCall was convicted of conspiring to engage in racketeering activities, conspiring to commit violence in aid of racketeering, violence in aid of racketeering, and possession of firearms in furtherance of a crime of violence. The violence in aid of racketeering charge carries a maximum penalty of 20 years in prison, while the firearm charge carries a consecutive sentence of five years up to life in prison.
- Christopher Timbers, aka “Alibi,” 38, an Outlaws member in the Manassas/Shenandoah Valley Chapter of the Copper Region. Timbers was convicted of conspiring to engage in racketeering activities, conspiring to commit violence in aid of racketeering, and violence in aid of racketeering. Timbers was acquitted of one count of possession of firearms in furtherance of a crime of violence.
Also today, Dennis Haldermann, aka “Chew Chew,” 46, a member of the Pagans Motorcycle Club from Chesterfield, Va., was acquitted of a violence in aid of racketeering charge.
Sentencing for Rosga, Fiel, McCall and Timbers is scheduled for April 8, 2011.
Evidence at trial showed that the Outlaws motorcycle gang is a highly organized criminal enterprise with a defined, multi-level chain of command that is ultimately overseen by Rosga, the national president. Leaders and members of the Outlaws in multiple states including Wisconsin, Maine, Montana, North Carolina, Tennessee, South Carolina and Virginia are charged in a June 2010 indictment. Under Rosga’s leadership, the enterprise is alleged to have engaged in violent racketeering activities with the intent to expand its influence and to control various parts of the country against rival motorcycle gangs, particularly the Hell’s Angels.
According to evidence at trial, the Outlaws planned multiple acts of violence against rival motorcycle gangs, including shows of force at the Cycle Expo in Henrico County, Va., in 2006; Dinwiddie Racetrack in Virginia in 2008; the Cockades Bar in Petersburg, Va., in 2009; Daytona Bike Week in Florida in 2009; and the Easyrider Bike Expo in Charlotte, N.C., in 2010. The indictment alleges that in the Cockades Bar show of force, members of the Pagans Motorcycle Club joined the Outlaws in the assault against rival gangs.
In addition, the evidence at trial showed that in 2008, the Outlaws established a clubhouse in Rock Hill, S.C., in territory traditionally controlled by the Hell’s Angels. The Outlaws understood that this act would create violent friction between the two organizations.
Evidence at trial also established that in September 2009, two members of the Outlaws were assaulted in Connecticut by members of the Hell’s Angels. This caused the Outlaws to increase their already violent approach to the Hell’s Angels in retaliation. In October 2009, this led to the alleged attempted murder of a Hell’s Angels member outside the Hell’s Angels’ clubhouse in Canaan, Maine. The victim was seriously injured from gunshot wounds to his neck.
In addition, the evidence showed that on April 17, 2010, Outlaw members of the Milwaukee and other Wisconsin chapters in the Gold Region, participated in a charitable event known as the Flood Run, crossing from Wisconsin into Minnesota where they brutally beat members of the Hell’s Angels and stole their club patches, also known as “colors.”
Witnesses at the trial also testified that the Outlaws regularly used and distributed narcotics and regularly used firearms or other dangers weapons.
The four men convicted today are among 27 individuals indicted in June 2010 as a result of a long-term investigation into criminal activities of the Outlaws motorcycle gang. To date, 17 of those indicted have pleaded guilty and one was previously convicted in an earlier trial.
The case was investigated by the ATF’s Washington Field Division; the FBI’s Washington Field Office; the Virginia State Police; the Chesterfield County Police Department; the Maine State Police, and numerous other law enforcement partners throughout the country. The prosecution was handled by Assistant U.S. Attorneys Dennis Fitzpatrick and Peter S. Duffey, Special Assistant U.S. Attorney Sam Kaplan, and Trial Attorney Theryn G. Gibbons of the Justice Department’s Criminal Division’s Gang Unit.
Justice Department Requires Lucasfilm to Stop Entering into Anticompetitive Employee Solicitation AgreementsRead the Press Release
WASHINGTON — The Department of Justice announced today that it has reached a settlement with Lucasfilm Ltd. that prevents it from entering into agreements restraining employee recruitment. The department said that the agreement between Lucasfilm and Pixar eliminated important forms of competition to attract highly skilled employees and, overall, significantly diminished competition to the detriment of affected employees who were likely deprived of information and access to better job opportunities.
The Department of Justice’s Antitrust Division filed a civil antitrust complaint today in U.S. District Court for the District of Columbia, along with a proposed settlement that, if approved by the court, would resolve the lawsuit.
Today’s complaint arose out of a larger investigation by the Antitrust Division into employment practices by high tech companies. In September 2010, the Antitrust Division reached a settlement with Adobe Systems Inc., Apple Inc., Google Inc., Intel Corp., Intuit Inc. and Pixar that prevented the companies from entering into no solicitation agreements for employees.
According to today’s complaint, Lucasfilm and Pixar agreed not to cold call each other’s employees; agreed to notify each other when making an offer to an employee of the other company; and agreed, when offering a position to the other company’s employee, not to counteroffer with compensation above the initial offer.
The department said that Pixar is not a named defendant in today’s complaint because the relief the department obtained in the previous settlement is sufficient to prevent Pixar from entering into these types of agreements.
"The agreement between Lucasfilm and Pixar restrained competition for digital animators without any procompetitive justification and distorted the competitive process," said Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. "The proposed settlement resolves the department’s antitrust concerns."
The digital animation sector faces strong demand for employees with advanced or specialized skills. A principal means by which digital animation companies recruit these employees is their direct solicitation, referred to as "cold calling." Savvy employees can use these companies’ tactics to extract multiple rounds of bidding, thus increasing their eventual salaries. These forms of competition, when unrestrained, result in better career opportunities, the department said.
The complaint alleges that the companies’ actions reduced their ability to compete for digital animation workers and interfered with the proper functioning of the price-setting mechanism that otherwise would have prevailed in competition for employees. None of the agreements was limited by geography, job function, product group or time period.
The proposed settlement, which if accepted by the court will be in effect for five years, prohibits the companies from engaging in anticompetitive agreements relating to employee hiring and retention. Although the complaint alleges only that the companies agreed to certain practices, the proposed settlement more broadly prohibits the companies from entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting or otherwise competing for employees. The companies will also implement compliance measures tailored to these practices.
Lucasfilm Ltd. is a California corporation with its principal place of business in San Francisco.
The proposed settlement, along with the department’s competitive impact statement, will be published in The Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to James J. Tierney, Chief, Networks & Technology Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street N.W., Suite 7100, Washington D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
Harris County, Texas, Commissioner and Local Real Estate Developer Indicted for Alleged Bribery ConspiracyRead the Press Release
WASHINGTON– A Harris County, Texas, commissioner and a Houston-based real estate developer have been charged with bribery conspiracy in an indictment returned yesterday by a federal grand jury in the Southern District of Texas, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
The indictment, unsealed today, charges Gerald R. Eversole, 67, and Michael D. Surface, 50, each with one count of conspiring to commit federal program bribery, and each with one count of federal programs bribery. Eversole was also charged with two counts of making a false statement on his federal tax return by failing to report things of value allegedly provided to him by Surface.
According to the indictment, from August 2000 through October 2007, Surface provided Commissioner Eversole with a series of things of value both directly and indirectly, including checks written directly to Commissioner Eversole, cashier’s checks provided to Commissioner Eversole, payments made to third parties, a loan guarantee, and travel and entertainment expenses. The indictment alleges that during the same time period Commissioner Eversole was accepting these things of value, Surface sought and obtained at least five lucrative Harris County contracts. These included contracts to house Harris County offices, as well as a construction maintenance contract. The indictment alleges that Commissioner Eversole repeatedly voted to award contracts to Surface and entities controlled by Surface, as well as used his official position to ensure funding for these contracts.
The indictment also alleges that Commissioner Eversole repeatedly voted to appoint Surface as chairman of the board of the Harris County Sports and Convention Corporation, a quasi-governmental organization charged with overseeing Reliant Stadium and Reliant Park.
The indictment alleges that Eversole and Surface sought to conceal their relationship by, among other things, using cashier’s checks and payments to third parties. The indictment alleges that Surface also actively sought to conceal his presence in two of the contracts so as to avoid scrutiny, and that Eversole concealed his acceptance of the things of value by filing false financial disclosure forms with the Harris County clerk.
The maximum penalty for the conspiracy charge is five years in prison and a $250,000 fine. The charge of federal program bribery carries a maximum penalty of 10 years in prison and a $250,000 fine. Each count of making a false statement carries a maximum penalty of three years in prison and a $100,000 fine.
An indictment is merely an accusation, and defendants are presumed innocent unless proven guilty in a court of law.
This case is being prosecuted by Senior Trial Attorney Mary K. Butler and Trial Attorney John P. Pearson of the Criminal Division’s Public Integrity Section. The case was investigated by the FBI and the Internal Revenue Service–Criminal Investigation.
Former Construction Company Executive Doing Business in Colorado Pleads Guilty to Providing an Illegal GratuityRead the Press Release
WASHINGTON — A former managing executive of a construction company that had substantial business at Fort Carson, a U.S. Army installation in Colorado Springs, Colo., pleaded guilty to providing an illegal gratuity to a contracting officer, the Department of Justice announced today.
According to a one-count felony charge filed on Dec. 2, 2010, in U.S. District Court in Denver, Wendel P. Torres provided an illegal gratuity to William T. Armstrong, the former chief of the construction division of the Fort Carson Directorate of Contracting, who was authorized to award contracts for construction projects on behalf of the U.S. Army.
According to the court documents, prior to April 2007, Armstrong had awarded multiple construction contracts at Fort Carson to Torres’ company. Armstrong contacted Torres in approximately April 2007 regarding construction materials he needed for his home. After some discussion, in May of 2007, Torres arranged for delivery of the construction materials to Armstrong’s home. Torres informed Armstrong that he did not need to pay for the materials and Armstrong did not pay for the materials. On Sept. 2, 2010, Armstrong pleaded guilty to providing a false statement to the U.S. Army when he did not report the receipt of the materials in his annual financial disclosure report. The department said that Torres has agreed to cooperate with the department’s ongoing investigation related to anticompetitive conduct at Fort Carson.
Torres faces a maximum sentence of two years in prison and a $250,000 fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s plea arises from an ongoing investigation related to the award of construction contracts at Fort Carson. This investigation is being conducted jointly by the Department of Justice Antitrust Division’s Chicago Field Office, the U.S. Army Criminal Investigation Command and the Defense Criminal Investigative Service, with the assistance of the U.S. Attorney’s Office in Denver.
Anyone with information concerning suspicious activity relating to the award of construction contracts at Fort Carson or other military bases should contact the Antitrust Division’s Chicago Field Office at 312-353-7530 or visit www.justice.gov/atr/contact/newcase.htm.
Monday 20 December 2010
Pharmaceutical Manufacturer to Pay $280 Million to Settle False Claims Act CaseRead the Press Release
WASHINGTON – Dey Inc., Dey Pharma L.P. (formerly known as Dey, L.P.) and Dey L.P. Inc. have agreed to pay $280 million to settle False Claims Act allegations, the Department of Justice announced today. This settlement resolves claims by the United States that the defendants engaged in a scheme to report false and inflated prices for numerous pharmaceutical products, knowing that federal health care programs relied on those reported prices to set payment rates. The actual sales prices for the Dey products were far less than what Dey reported.
The United States alleged that Dey reported false prices for the following drugs: Albuterol Sulfate, Albuterol MDI, Cromolyn Sodium and Ipratropium Bromide. The difference between the resulting inflated government payments and the actual price paid by health care providers for a drug is referred to as the “spread.” The larger the spread on a drug, the larger the profit for the health care provider or pharmacist who is reimbursed by the government. The government alleges that Dey created artificially inflated spreads to market, promote and sell the drugs to existing and potential customers. Because payment from the Medicare and Medicaid programs was based on the false inflated prices, the government alleged that Dey caused false and fraudulent claims to be submitted to federal health care programs and, as a result, the government paid millions of claims for far greater amounts than it would have if Dey had reported truthful prices.
This is the fourth such settlement with pharmaceutical manufacturers that the Department of Justice has announced this month. On Dec.7, 2010, the Department announced settlements totaling $421.1 million involving similar allegations against three other manufacturers: Abbott Laboratories Inc., B. Braun Medical Inc. and Roxane Laboratories Inc.
“With this settlement, the Department of Justice has now recovered over $2 billion dollars from pharmaceutical manufacturers arising from similar unlawful drug pricing schemes. As the department alleged in its complaint against Dey, by offering customers one price and then falsely reporting inflated prices to the lists the government uses when calculating how much to pay for the drugs, pharmaceutical companies created an incentive for the purchase of their drugs by allowing buyers to pocket the difference between the actual price of the drug and the inflated government payment,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “ Taxpayer-funded kickback schemes like this not only cost federal health care programs millions of dollars, they threaten to undermine the integrity of the choices health care providers make for their patients.”
United States Attorney Carmen M. Ortizofthe District of Massachusetts said, “Our federally-funded health care programs pay for prescription drugs based in part on pricing information reported by pharmaceutical companies. When a company reports falsely inflated prices for the purpose of increasing its sales and profits, it undermines the integrity of our health care system. Drug companies must understand that they risk substantial liability if they report false drug pricing information.”
The settlement resolves a whistleblower action filed under the False Claims Act by Ven-A-Care of the Florida Keys Inc., a Florida home-infusion company, and its principals, entitled United States of America ex rel. Ven-a-Care of the Florida Keys Inc. v. Dey Laboratories, et al., Civil Action No. 05-11084-PBS (D. Mass). The False Claims Act’s qui tam provisions allow private persons with knowledge of fraud to file suit on behalf of the United States and share in any recovery. As part of this settlement, the Ven-A-Care whistleblowers will receive a share of approximately $67.2 million.
“This settlement with Dey highlights the Office of the Inspector General’s decade-long commitment to protecting against artificially inflated drug prices,” said Daniel R. Levinson, Inspector General of the Department of Health & Human Services. “Our analyses of drug price reporting practices – including the use of ‘Average Wholesale Price’ – have consistently identified excessive Medicare and Medicaid payments resulting from these practices.”
The case was handled by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Massachusetts and the Office of Inspector General of the Department of Health and Human Services.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5.3 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 now approach $6.8 billion.
Justice Department Settles with Cosmetology School in Puerto Rico on Allegations of HIV DiscriminationRead the Press Release
WASHINGTON – The Justice Department today announced the settlement of an Americans with Disabilities Act (ADA) complaint against Modern Hairstyling Institute Inc. in Bayamón, Puerto Rico.
The Justice Department initiated its investigation in response to an allegation that Modern Hairstyling Institute Inc. discriminated against an HIV-positive applicant by denying her enrollment. Modern Hairstyling Institute Inc.’s cooperation in arriving at this agreement was an important factor in resolving the matter promptly, the department said.
Under the terms of the settlement agreement, Modern Hairstyling Institute Inc. made an offer of enrollment to the complainant, will cease requesting information about HIV/AIDS status from future applicants and will provide training to all employees about discrimination on the basis of disability. Modern Hairstyling Institute Inc. will also pay a $5,000 civil penalty to the United States and $8,000 in damages to the complainant.
“It is critical that we continue to work to eradicate discriminatory and stigmatizing treatment towards individuals with HIV based on unfounded fears and stereotypes,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The ADA clearly protects individuals with HIV and other disabilities from this kind of exclusion or marginalization.”
Title III of the ADA prohibits public accommodations, such as Modern Hairstyling Institute Inc. from excluding people with disabilities, including people with HIV, from enjoying the services, goods and accommodations provided. Those interested in learning out more about federal disability rights statutes can call the Justice Department’s toll-free ADA information line at 800-514-0301, 800-514-0383 (TTY), or access the ADA website at www.ada.gov.
Justice Department Settles Housing Discrimination Lawsuit Against South Dakota Apartment OwnersRead the Press Release
WASHINGTON - The Justice Department today announced that South Dakota property owner TK Properties L.L.C. and one of its principals, Scott Terveen, have agreed to pay $30,000 in monetary damages and civil penalties to settle a Fair Housing Act lawsuit against them. The lawsuit alleges that they discriminated against three families who lived at Lakeport Village Apartments, a 48-unit apartment complex in Sioux Falls, S.D., that TK Properties and Terveen previously managed.
Today’s settlement, which must still be approved by the U.S. District Court for the District of South Dakota, partially resolves a lawsuit filed by the Department in October 2010 against TK Properties, Terveen, and two employees, Ann Wagner and Corey Anderson. The United States’ lawsuit alleged that defendants, through the actions of Wagner and Anderson, created a hostile housing environment for one African American family and two white families who associated with the African American family while they were tenants at Lakeport Village. The tenants eventually moved out as a result of the defendants’ conduct. Today’s settlement resolves the claims against TK Properties and Scott Terveen. The settlement does not resolve the United States’ claims against Wagner and Anderson, who no longer work for TK Properties. Wagner and Anderson did not respond to the complaint and the court entered a judgment of default against them in July 2010.
“No person or family should be denied the right to equal treatment in housing because of their race or because of the race of their friends or relatives,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “This settlement illustrates the Department’s commitment to protecting equal housing opportunities for all.”
“This settlement helps ensure that equal housing opportunities required by law are available to all South Dakotans. Our office will not tolerate discrimination against persons based upon their race,” said U.S. Attorney for the District of South Dakota Brendan Johnson.
“Treating a family differently because of their race, and then to retaliate against another family for standing up for their neighbors’ fair housing rights, violates the law and is unacceptable in a nation founded on the principles of justice and equality,” said John Trasviña, Department of Housing and Urban Development (HUD) Assistant Secretary for Fair Housing and Equal Opportunity. “HUD and the Department of Justice will continue to work together to end all forms of housing discrimination.”
The lawsuit originated as a result of complaints the three families filed with HUD. After an investigation, HUD found reasonable cause to believe that unlawful discrimination had occurred and referred the matter to the Justice Department.
Under the settlement, TK Properties will pay $26,000 to the three families and $4,000 to the United States as a civil penalty. The settlement also requires TK Properties and Terveen to adopt non-discrimination policies at their rental properties, participate in fair housing training and require their employees to receive training. TK Properties and Terveen also admit the United States’ factual allegations about the discriminatory conduct carried out by Wagner and Anderson against the three families.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. Individuals who believe that they may have been victims of housing discrimination should call the Housing Discrimination Tip Line (1-800-896-7743) or email the Justice Department at [email protected] . Such persons may also contact the U.S. Department of Housing and Urban Development at 1-800-669-9777 or at www.hud.gov . Fair housing enforcement is a priority of the department’s Civil Rights Division. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt .
Former Senior Executives of Latin Node Inc. Charged with Bribing Honduran Officials and Money LaunderingRead the Press Release
WASHINGTON – Jorge Granados and Manuel Caceres, the former chief executive officer and the vice president of business development, respectively, for Miami-based telecommunications company Latin Node Inc. (LatiNode) have been indicted for allegedly paying more than $500,000 in bribes to government officials in Honduras, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; John V. Gillies, Special Agent in Charge of the FBI’s Miami Division, and Anthony V. Mangione, Special Agent in Charge of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), Miami Field Office.
Granados, 54, and Caceres, 64, are charged with criminal violations of the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA), and international money laundering. The 19-count indictment, returned by a federal grand jury in Miami on Dec. 14, 2010, was unsealed today. The defendants were arrested today in Miami and made initial appearances in U.S. District Court for the Southern District of Florida.
“Foreign bribery, like domestic corruption, breeds instability and undermines democratic processes,” said Assistant Attorney General Breuer. “As this indictment and the previous guilty plea by LatiNode show, the department is committed to holding accountable individuals and companies alike for alleged foreign bribery schemes.”
“This new indictment represents the FBI’s commitment to investigating not just the corrupt acts of a corporate entity, but the individuals who are behind it,” said John V. Gillies, Special Agent in Charge, FBI Miami Division.”
“Anyone who believes paying bribes in foreign countries is just the cost of doing business should think about the repercussions – whether it is worth going to prison,” said Anthony V. Mangione, special agent in charge of ICE Homeland Security Investigations in Miami. “ICE HSI’s Foreign Corruption Investigative group will continue to provide resources and support to our international partners in this public corruption battle in an effort to maintain fair and honest business practices between our country and other nations.”
According to court documents, LatiNode provided wholesale telecommunications services using Internet protocol technology to countries throughout the world, including Honduras. In December 2005, LatiNode learned that it was the sole winner of an “interconnection agreement” with Empresa Hondureña de Telecomunicaciones (Hondutel), the wholly state-owned telecommunications authority in Honduras. The agreement permitted LatiNode to use Hondutel’s telecommunications lines in order to establish a network between Honduras and the United States and provide long distance services between the two countries. LatiNode was required to pay Hondutel a set rate per minute for calls to Honduras.
According to the indictment, soon after winning the contract with Hondutel, the defendants sought a reduction in the rates payable to Hondutel. The defendants also learned that a newly elected high-ranking government official’s friend had been made a manager of Hondutel, who considered rescinding the agreement with LatiNode. Caceres allegedly informed Granados and another LatiNode executive by e-mail that “it would be necessary to ‘give’ something to the [Hondutel] general manager [ ]. I will try this with [the manager].” Caceres said that he would “meet with these criminals,” adding “But I will solve this problem for you, I promise. Not only will we get a PP rate (preferential of preferentials) but the capacity we need. I have some things to reveal to them in exchange for what I’m going to ask of them.”
According to the indictment, the defendants and other LatiNode executives agreed to a secret deal to pay bribes to the manager, as well as to a senior attorney for Hondutel who acted as the manager’s “straw man,” and to a minister of the Honduran government who became a representative on the Hondutel Board of Directors. The alleged bribes were paid in exchange for keeping the interconnection agreement in place and receiving reduced rates and other economic benefits from Hondutel. Between September 2006 and June 2007, the defendants allegedly paid more than $500,000 in bribes to the officials, concealing many of the payments by laundering the money through LatiNode subsidiaries in Guatemala and to accounts in Honduras controlled by the Honduran government officials.
As the payments grew, according to the indictment, the defendants allegedly became concerned about the rising costs of the scheme and the possibility of detection. On one occasion, according to the indictment, Caceres forwarded to Granados an e-mail from the senior attorney, identifying four bank accounts to receive the bribe payments. Caceres told Granados, “I recommend sending [the manager] $100,000 tomorrow to the bank accounts and in the amounts according to the instructions in [the senior attorney’s] e-mail. We have stretched the rope to the maximum, but we are reaching the limit and we don’t want to break it. This payment will create tolerance for any late payments to Hondutel, avoiding the removal of capacity; on the contrary, it will help to get them to increase it for us.” According to the indictment, Granados approved the payments, and another LatiNode executive facilitated the wire transfers.
In early 2007, according to public filings, eLandia International Inc., announced an agreement to acquire LatiNode. The indictment alleges that t he defendants took additional measures to conceal the illicit payments during the acquisition due diligence process. Specifically, according to the indictment, Granados allegedly urged Caceres to formalize the secret rate reduction deal with the Honduran officials, as the issue could cause a “HUGE” problem during the process. The defendants also allegedly urged the Honduran officials to sign fraudulent “consulting contracts” that would disguise the true nature of the relationship. Caceres explained to the officials in an e-mail that, “[n]o government official (from Hondutel or from the government) can appear” on the consulting contract, and that future payments “will come from eLandia through Servicios IP, a firm of ours in Guatemala.”
On April 7, 2009, LatiNode pleaded guilty to a one-count information charging the company with a criminal violation of the FCPA. As part of the plea agreement, LatiNode agreed to pay a $2 million fine. The resolution of the criminal investigation of LatiNode reflected, in large part, the actions of eLandia in disclosing potential FCPA violations to the department after eLandia’s acquisition of LatiNode and discovery of the improper payments.
The conspiracy to commit violations of the FCPA carries a maximum penalty of five years in prison and a fine of the greater of $250,000 or twice the value gained or lost. The FCPA counts each carry a maximum penalty of five years in prison and a fine of the greater of $100,000, or twice the value gained or lost. The conspiracy to commit money laundering count and the money laundering counts each carry a maximum penalty of 20 years in prison and a fine of the greater of $500,000, or twice the value of the monetary instrument or funds involved in the offense. The indictment also gives notice of criminal forfeiture.
The case is being prosecuted by Senior Litigation Counsel Jeffrey H. Knox and Trial Attorney Amanda Aikman of the Criminal Division’s Fraud Section. The case was investigated by the FBI’s Miami Field Office and HSI Foreign Corruption Investigations Group in Miami.
Former Alabama State Lobbyist Pleads Guilty in Wide-Ranging Conspiracy to Influence and Corrupt Votes Related to Electronic Bingo LegislationRead the Press Release
WASHINGTON – A former Alabama state lobbyist pleaded guilty today before U.S. Magistrate Judge Wallace Capel Jr. to his role in conspiring to bribe legislators in exchange for their favorable votes on pro-gambling legislation, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and Special Agent in Charge Timothy J. Fuhrman of the FBI’s Mobile Field Office.
Jarrod D. Massey, 39, of Montgomery, Ala., pleaded guilty to one count of conspiracy to commit federal program bribery and five counts of federal program bribery. Massey and his 10 co-defendants were charged in a 39-count indictment returned by a federal grand jury on Oct. 1, 2010, with a variety of criminal offenses for their alleged roles in the bribery scheme. The remaining 10 defendants include two current Alabama state legislators, two former Alabama state legislators, two lobbyists, two business owners and one of their employees, and an employee of the Alabama legislature.
“Jarrod Massey has admitted that he bribed members of the Alabama state legislature in exchange for their votes in favor of electronic bingo gambling legislation,” said Assistant Attorney General Breuer. “In a democracy, votes should be cast on the merits and in the best interests of constituents, and not influenced by bribes and the possibility of personal gain. Mr. Massey has admitted his wrongdoing, and will now face the consequences of his corrupt conduct.”
“Today’s plea by Mr. Massey is another step in the investigation and prosecution of this significant public corruption matter,” said Special Agent in Charge Timothy J. Fuhrman of the FBI’s Mobile Field Office. “The FBI remains committed to continuing this investigation wherever the facts may lead and will devote all necessary investigative techniques, resources and efforts to its final resolution.”
According to information contained in court documents and presented during the plea hearing, Massey was employed from April 2006 until May 2010 as a registered lobbyist and consultant with Mantra Governmental, a lobbying firm he owned in Montgomery. Massey’s largest client was Ronald E. Gilley, who owned a controlling interest in Country Crossing, an entertainment and gambling development in Houston County, Ala., which also sought to offer electronic bingo gambling machines to the public. Milton E. McGregor owned a controlling interest in Macon County Greyhound Park Inc., also known as Victoryland, in Macon County, Ala., and Jefferson Country Racing Association in Jefferson County, Ala. He also had an ownership interest in other entertainment and gambling facilities in Alabama, including Country Crossing, which offered or sought to offer electronic bingo gambling machines to the public.
According to court documents, during the 2009 and 2010 Alabama state legislative sessions, McGregor and Gilley, along with others, allegedly promoted the passage of pro-gambling legislation that would have been favorable to the business interest of individuals operating electronic bingo facilities in Alabama, including themselves.
Massey admitted, among other things, that he offered former State Senator James E. Preuitt $1 million and that he authorized former employee and lobbyist Jennifer Pouncy to offer Preuitt substantial assistance in his reelection campaign, including telling Pouncy that they had up to $2 million of Gilley’s money to use in obtaining Preuitt’s vote on the pro-gambling legislation. Pouncy pleaded guilty on Sept. 28, 2010, for her role in the bribery scheme, and is scheduled to be sentenced on Aug. 11, 2011. In her guilty plea, Pouncy admitted to offering $2 million to Preuitt in exchange for his favorable vote on the pro-gambling legislation. Massey also admitted that he and others discussed purchasing a large number of vehicles from Preuitt’s auto dealership in exchange for Preuitt’s vote.
Massey also admitted that he conspired with others to bribe a member of the Alabama House of Representatives during the 2009 legislative session, promising hundreds of thousands of dollars in campaign support in exchange for the legislator’s favorable vote on pro-gambling legislation. Similarly, Massey admitted that in 2010, he and his co-conspirators sought to bribe a member of the Alabama Senate, offering the legislator $1 million per year, to use at the legislator’s discretion. Massey admitted that the illegal monies were to be disguised as payment for work on a public relations job.
During his plea, Massey also admitted he was involved with bribe payments to former State Senator Larry P. Means, who abstained from an earlier vote on the pro-gambling legislation in 2010, but after allegedly soliciting bribes, voted in favor of the legislation. In addition, Massey admitted that he gave $5,000 to State Senator Quinton T. Ross Jr. for his vote in favor of the pro-gambling legislation, and that Ross solicited an additional $25,000 from Massey for his reelection campaign in the weeks leading up to the vote. Ross ran unopposed in the election. Finally, Massey admitted that he gave State Senator Harri Anne Smith more than $13,000 between December 2009 and March 2010, in return for her vote in favor of the pro-gambling legislation.
At sentencing, scheduled for Sept. 26, 2011, Massey faces a maximum penalty of five years in prison and a $250,000 fine on the conspiracy charge. Each count of federal program bribery carries a maximum penalty of 10 years in prison and a $250,000 fine.
The case is being prosecuted by Senior Deputy Chief Peter J. Ainsworth and Trial Attorneys Eric G. Olshan, Barak Cohen and E. Rae Woods of the Criminal Division’s Public Integrity Section; Senior Litigation Counsel Brenda K. Morris of the Criminal Division; and Assistant U.S. Attorneys Louis V. Franklin and Steve P. Feaga of the Middle District of Alabama. The case is being supervised by the Criminal Division’s Public Integrity Section, and is being investigated by the FBI’s Mobile Field Office.
Friday 17 December 2010
Woman Sentenced in Columbus, Ohio, for Role in Human Trafficking ConspiracyRead the Press Release
WASHINGTON - Maria Terechina, a national of the Russian Federation, was sentenced today in U.S. District Court in Columbus, Ohio, for her role in a human trafficking conspiracy involving guestworkers who worked in hotels as housekeepers and laundry workers. Terechina was sentenced to 12 months in prison and ordered to pay nearly $250,000 in restitution to her victims. After her release from prison, Terechina will be on federal supervised release for three years.
During her guilty plea hearing in April, Terechina admitted that she engaged in the harboring and transporting of dozens of illegal aliens from Russia, Estonia, Belarus, Ukraine, and other Eastern European nations. The guestworkers who labored for Terechina worked in various hotels in and around Columbus. Terechina admitted that she agreed to hold some of the workers’ passports and immigration documents in order to prevent them from leaving their employment. Terechina also admitted that she defrauded the United States of approximately $185,000 in taxes.
“ The defendant participated in a scheme that created a condition of modern-day slavery, using intimidation to deprive the workers of their freedom for her own financial gain,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “ The Department of Justice is committed to vigorously prosecuting cases of human trafficking.”
Carter M. Stewart, the U.S. Attorney for the Southern District of Ohio, stated “We will continue our efforts to stem the rising tide of involuntary servitude by bringing traffickers to justice and working to restore the rights and dignity of human trafficking victims.”
“The FBI is committed to protecting all persons, regardless of nationality, from slave trafficking. Those who profit from such activity should recognize the consequences of their actions,” said Keith L. Bennett, Special Agent in Charge of the Cincinnati Division of the FBI.
Jose A. Gonzalez, Special Agent in Charge, IRS, Criminal Investigations, stated, “Employers who employ illegal aliens and do not withhold employment taxes are victimizing legitimate businesses by creating an unfair competitive advantage.”
The case involving Terechina is related to the case of United States v. Yaroslav Rochniak, et al., in the Western District of Pennsylvania. All six defendants in that case also have pleaded guilty.
The Terechina case was investigated by Special Agents of the FBI; U.S. Immigration and Customs Enforcement; the U.S. Department of Labor, Office of the Inspector General; and the U.S. Department of Treasury, Internal Revenue Service. The case was jointly prosecuted by Assistant U.S. Attorney Daniel A. Brown from the U.S. Attorney’s Office for the Southern District of Ohio, and Trial Attorney Ryan R. McKinstry from the Civil Rights Division of the U.S. Department of Justice.
Vice President of Florida Corporation Sentenced to 108 Months in Prison for Transporting Child PornographyRead the Press Release
WASHINGTON – Jeffrey Robert Libman, the vice president and co-director of Webe Web Corporation, a Florida corporation, was sentenced yesterday to 108 months in prison for transporting child pornography, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Joyce White Vance of the Northern District of Alabama.
Libman, 43, of Ft. Lauderdale, Fla., pleaded guilty in U.S. District Court in the Northern District of Alabama on Sept. 15, 2010, to 16 counts of transporting child pornography. Libman was also sentenced to lifetime supervised release, to follow his prison term.
According to court documents, Webe Web was the registered owner of the website "www.childsupermodels.com," which purported to be a child modeling website that promoted models 7- through 16-years old and their photographers. It contained hyperlinks to websites containing photographs of individual "child super models" featuring minor female children in various poses and wardrobes. According to court documents, Libman was responsible for building and maintaining these websites.
Libman admitted that the websites pertaining to 16 different children contained illegal images of child pornography. In some of the photos, the victims, all girls aged 8 to 15, were wearing underwear, lingerie, bathing suits and other revealing outfits, and were posed in positions that constituted child pornography.
According to court documents, viewers of the websites could preview a certain number of images for free on the website homepage. If viewers wanted to join the website to access additional photographs, they could purchase a 30-day membership for approximately $30 per month. Libman admitted that the websites depicting the 16 victims generated approximately $1 million in revenue.
Libman also admitted that Webe Web promoted subscriptions to these individual sites through its free advertising website known as Babble Club. On Babble Club’s website, members could receive a free sample of images of the children. According to court documents, the website encouraged the purchase of subscriptions to the individual websites of the children, and hosted discussion boards and groups which were devoted to each individual website. Babble Club members made postings to the discussion boards, which included comments on specific images they liked, the type of clothing and poses they liked, and poetry written to the photographed child. Certain members posted expressions of fondness and devotion for a photographed child.
In April 2010, Webe Web pleaded guilty to one count of conspiracy to produce child pornography and 16 counts of transporting child pornography. The president and co-director of Webe Web, Marc Evan Greenberg, also pleaded guilty in April 2010 to one count of money laundering based on his processing of the proceeds generated by Webe Web through its distribution of images of child pornography. Greenberg is scheduled to be sentenced on Jan. 14, 2011. According to its plea agreement, Webe Web will forfeit $1 million and 19 internet domain names.
According to court documents, the photographs of the 16 victims in this case were taken by Jeff Pierson, a former photographer based in the Birmingham, Ala., area. Pierson pleaded guilty in January 2007 to conspiracy to transport child pornography and transportation of child pornography.
According to his plea agreement, Libman was charged in an unrelated case in the Southern District of Florida. Libman pleaded guilty in September 2009 to one count of receipt of child pornography and was sentenced in November 2009 to 87 months in prison.
This case is being prosecuted by Assistant U.S. Attorneys Jim Phillips and Daniel J. Fortune of the Northern District of Alabama, and Assistant Deputy Chief Alexandra Gelber of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).
This case was investigated by the FBI and the U.S. Postal Inspection Service. The Document and Media Exploitation Branch of the National Drug Intelligence Center provided assistance in ascertaining the revenue flow of this criminal enterprise to support analysis of and to identify the ill gotten gains of the defendants.
Rhode Island Woman and Son Sentenced for Interstate Extortion Related to Organized CrimeRead the Press Release
Dorothy St. Laurent, 71, of Johnston, R.I., and her son Anthony St. Laurent Jr., 44, of Cranston, R.I., were sentenced today in U.S. District Court in Providence, R.I., for their participation in an interstate extortion scheme, in violation of the Hobbs Act, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Peter F. Neronha for the District of Rhode Island; and Richard DesLauriers, Special Agent in Charge of the FBI’s Boston Field Office.
U.S. District Court Judge William E. Smith sentenced Anthony St. Laurent Jr., to 78 months in prison, followed by three years of supervised release, to include 500 hours of community service each year during the term of supervised release. Judge Smith sentenced Dorothy St. Laurent to three years of probation, the first six months of which will be served in home confinement. She also was ordered to perform 500 hours of community service per year during the term of supervised release.
Dorothy St. Laurent and Anthony St. Laurent Jr., were charged in a criminal complaint in February 2010 with extorting payments from bookmakers in the Taunton, Mass., area on behalf of Anthony St. Laurent Sr., (Dorothy St. Laurent’s husband and Anthony St. Laurent Jr.,’s father.) According to information presented in court, Anthony St. Laurent Sr., has been identified by law enforcement as a member of New England’s La Cosa Nostra organized crime family. The defendants pleaded guilty in August 2010 to interference with commerce by threats or violence.
According to information presented in court, beginning at least in 1988 and continuing through early February 2009, Dorothy St. Laurent and Anthony St. Laurent Jr., conspired with each other and others to extort “protection” payments from a group of illegal bookmakers operating in and around Taunton.
Dorothy St. Laurent and Anthony St. Laurent Jr., in conversations recorded by the FBI in late 2008 and early 2009, discussed efforts to maintain the extortion scheme, which was generating $4,100 in cash every two weeks at the time. According to the plea agreement, the defendants extorted more than $800,000 and less than $1.5 million during the course of the scheme.
According to information present at court and in court documents, Anthony St. Laurent Sr., functioned as the overall leader of this scheme. Dorothy St. Laurent served as the primary collection agent of the cash payments provided by the bookmakers, while Anthony St. Laurent, Jr.’s role was to both threaten violence and on at least one occasion, to engage in actual violence to ensure continued payment.
The case was prosecuted by Trial Attorney Scott Lawson of the Criminal Division’s Organized Crime and Racketeering Section. Assistant U.S. Attorney William J. Ferland of the District of Rhode Island assisted in the prosecution of this case.
The case was investigated by the FBI, with the assistance of Rhode Island State Police and the Providence Police Department.
Miami-area Clinic Owner Sentenced to 60 Months in Prison for Role in Medicare Fraud Scheme Involving Miami-area Home Health AgenciesRead the Press Release
WASHINGTON –Yudel Cayro, owner and operator of Courtesy Medical Group Inc., a medical clinic in Miami, was sentenced to 60 months in prison for his role in a wide-ranging Medicare fraud scheme involving Miami-area home health agencies, the Departments of Justice and Health and Human Services (HHS) announced today.
U.S. District Judge Adalberto Jordan also ordered Cayro to serve two years of supervised release following his prison term and ordered him to pay $9.8 million in restitution jointly and severally with his co-defendants and co-conspirators in a related case. The restitution is to be paid to the victim in this case, the Centers for Medicare and Medicaid Services (CMS).
According to court documents, Cayro admitted that Courtesy operated in part to provide unnecessary prescriptions, plans of care and medical certifications, among other things, to Miami-area home health agencies in return for kickbacks and bribes. Courtesy provided the fraudulent medical documents so that the home health agencies could bill the Medicare program for expensive home health services and therapy purportedly for insulin dependant diabetic Medicare beneficiaries. In fact, the beneficiaries did not need and in some cases did not receive the services.
According to court documents, approximately 344 prescriptions for these unnecessary services were issued through Courtesy and signed by Cayro’s co-defendant, Dr. Fred Dweck. As a result, Medicare was fraudulently billed approximately $16.6 million for home health services. Medicare paid almost $10 million of the fraudulent claims. Another owner and operator of Courtesy, co-defendant Arturo Fonseca, was sentenced in November 2010, by Judge Jordan to 60 months in prison and two years of supervised release.
Three of Cayro’s co-defendants, Miami-area nurses Armando Sanchez, Marlenys Fernandez and Silvio Ruiz were sentenced last week to prison for their roles in the scheme. Sanchez and Fernandez were each sentenced to 30 months in prison. Ruiz was sentenced to four months in prison. Judge Jordan also ordered Fernandez to pay $331,622, Sanchez to pay $602,585, and Ruiz to pay $79,230 in restitution to CMS, jointly and severally with their co-defendants and co-conspirators in a related case.
On Dec. 7, 2010, another co-defendant, registered nurse Sheillah Rotta, was sentenced by Judge Jordan to two months in prison, followed by two years of supervised release, for her participation in the scheme. Rotta was also ordered to pay $74,164 in restitution to CMS, jointly and severally with her co-defendants and co-conspirators in a related case.
According to court documents, the nurses were engaged in the fraudulent scheme at ABC Home Health and Florida Home Health Care Providers Inc., two Miami home health agencies that were engaged in billing the Medicare program for unnecessary home health services for Medicare beneficiaries. Specifically, the nurses admitted to falsifying patient files to make it appear that these Medicare beneficiaries qualified for two to three times daily skilled nursing visits to purportedly administer diabetic insulin injections. In fact, these Medicare beneficiaries did not need nor qualify for these services.
According to court documents, Sanchez admitted that as a result of his actions, more than $900,000 was falsely billed to the Medicare program; Fernandez admitted to causing approximately $500,000 in fraudulent billings to Medicare; Rotta admitted to causing more than $100,000 in fraudulent billing; and Ruiz admitted to causing approximately $115,000 in fraudulent billing.
Additional co-defendants await sentencing in January 2011, including Dr. Fred Dweck, whose sentencing was continued to Jan. 28, 2011.
Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida; John V. Gillies, Special Agent-in-Charge of the FBI’s Miami field office; and Special Agent-in-Charge Christopher Dennis of the HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami office.
The cases were prosecuted by Trial Attorney N. Nathan Dimock of the Criminal Division’s Fraud Section. The cases were investigated by the FBI and HHS-OIG.
The cases were brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Florida and the Criminal Division’s Fraud Section. Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 825 individuals who collectively have falsely billed the Medicare program for more than $2 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Justice Department Files Fair Housing Lawsuit Against Mississippi Newspaper and Two Individuals for Discrimination Against Families with ChildrenRead the Press Release
WASHINGTON – The Justice Department today filed a lawsuit against a Gulfport, Miss., newspaper and a landlord and her agent for violating the Fair Housing Act by discriminating against families with children.
The lawsuit, filed in the U.S. District Court for the Southern District of Mississippi, charges that Penny Pincher, a weekly want-ad newspaper distributed along Mississippi’s Gulf Coast, engaged in a pattern or practice of violating the Fair Housing Act or denied rights protected by the act by accepting and publishing 10 advertisements for rental housing that stated illegal preferences against families with children. The suit also charges that, by placing one of those ads and by orally stating an illegal preference against renting to families with children, Lynn Cooley and Michael Law violated the Fair Housing Act.
"Housing discrimination against families with children has been illegal for more than 20 years, but it remains a persistent problem," said Thomas E. Perez, Assistant Attorney General for the Justice Department’s Civil Rights Division. "The Justice Department will continue its vigorous enforcement of fair housing laws that protect the rights of families with children."
"The U.S. Attorney’s Office is committed to helping to eradicate all forms of housing discrimination in the Southern District of Mississippi. All citizens and their families should be free to choose where they want to live without fear of discrimination," said Donald R. Burkhalter, U.S. Attorney for the Southern District of Mississippi.
"There is no room for discrimination against families with children in America’s communities," stated John Trasviña, Department of Housing and Urban Development (HUD) Assistant Secretary for Fair Housing and Equal Opportunity. "In Gulfport and around the country, HUD works close with the Department of Justice to take swift action where we believe housing discrimination has occurred."
This lawsuit arose as a result of complaints filed with the HUD by a fair housing group and a woman with three children who was searching for housing for her family. The woman’s search led her to Penny Pincher, in which she read Cooley’s ad offering a house for rent with the proviso, "no children." She contacted the housing group, Gulf Coast Fair Housing Center, which conducted testing at Cooley’s property and monitored the advertisements published by Penny Pincher. After HUD investigated the complaints, it issued three charges of discrimination and the matters were referred to the Justice Department.
The lawsuit seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions and a civil penalty.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact HUD at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must still be proven in federal court.
Founding Member of Abu Sayyaf Group Sentenced to 23 Years in Prison for 1995 Hostage Taking Involving U.S. and Philippine CitizensRead the Press Release
WASHINGTON -- Madhatta Asagal Haipe, a citizen of the Philippines and founding member of Al-Harakat Al-Islamiyyah, also known as the Abu Sayyaf Group (ASG), was sentenced today to 23 years in prison after earlier pleading guilty to four counts of hostage taking in the 1995 abduction of 16 people, including four U.S. citizens, in the Philippines.
The sentence was announced by David Kris, Assistant Attorney General for National Security; Ronald C. Machen Jr., U.S. Attorney for the District of Columbia; and Daphne Hearn, Interim Special Agent in Charge of the FBI Honolulu Field Office.
Haipe, 48, was extradited to the United States from the Philippines in 2009 to face the charges in this case. He pleaded guilty in July 2010, and was sentenced today by the Honorable Judge Richard W. Roberts in the U.S. District Court for the District of Columbia.
According to the factual proffer in support of the guilty plea, to which Haipe previously agreed in court, Haipe was the general secretary of the ASG, or second-in-command, under the Amir (leader) of the ASG, at the time of the hostage taking. The Amir of the ASG had directed that members of the group engage in kidnappings for ransom in order to raise funds for the group and to raise the public’s awareness of the group’s purpose. The ASG was subsequently designated as a foreign terrorist organization by the U.S. Secretary of State, and remains so designated today.
As admitted by Haipe as part of his guilty plea, on Dec. 27, 1995, several armed members of the ASG kidnapped 16 individuals, including four U.S. citizens, one U.S. permanent resident alien and 11 Philippine citizens, in the rugged area around Trankini Falls, near Lake Sebu, in southern Mindanao, in the Philippines. The hostages, including six children, were forced to march up a mountainside. Some of the adults had rope tied around their hands or neck.
Haipe informed the hostages that they were being kidnapped for ransom, and he individually questioned some of them to determine their nationality and the amount of ransom to be demanded. Later that same day, Haipe decided to release four of the 16 hostages to allow them to collect a ransom totaling at least one million Filipino pesos (equivalent to about $38,000 U.S. dollars, at the time). He threatened that if the released hostages told anyone about the kidnapping, those remaining in captivity would be killed.
Haipe and his group then forced the remaining hostages to continue marching up the mountainside to evade capture by the Philippine authorities. Four days later, on Dec. 31, 1995, Haipe and his group released the remaining hostages after a ransom was paid.
Many of the victims of this crime came to Washington for today’s sentencing.
Haipe was indicted for this crime by a federal grand jury in Washington, D.C., in November 2000. The Department of Justice and the FBI, working with their partners in the Philippines, have vigorously pursued this case for years.
"I applaud the FBI agents, Justice Department prosecutors and authorities in the Philippines who relentlessly pursued this matter on behalf of the victims who were held hostage and threatened with death by this Abu Sayyaf leader. With today’s sentence, Mr. Haipe is finally being held accountable for his actions," said Assistant Attorney General Kris.
"Fifteen years ago in the southern Philippines, Abu Sayyaf’s second-in-command threatened the lives of 16 innocent men, women and children," said U.S. Attorney Machen. "It was incredibly gratifying that so many of those victims were able to stand today in an American courtroom and watch the terrorist who held them hostage be sent to prison for his crimes."
"For 15 years, the Honolulu Division of the FBI worked closely with Philippine authorities to bring this defendant to justice," said FBI Interim Special Agent in Charge Hearn. "This case can be seen as a model of international law enforcement coordination between friendly nations."
The investigation was conducted by the FBI’s Honolulu Field Office, led for the past several years by Special Agent A. Ripley McGuinn, with substantial assistance from the Philippines Department of Justice, the Philippine National Police, the National Bureau of Investigation, the Anti-Money Laundering Council and the Philippine Department of Foreign Affairs. The Criminal Division’s Office of International Affairs and, in particular, Robert Courtney, the U.S. Justice Department’s Attaché to the Philippines, also provided substantial assistance in this case.
The prosecution was handled by Assistant U.S. Attorneys Gregg Maisel and Anthony Asuncion of the U.S. Attorney’s Office for the District of Columbia, as well as Trial Attorney T.J. Reardon, III, of the Counterterrorism Section of the Justice Department’s National Security Division.
Former Grant Administrator and Legal Assistant of American Samoa Non-profit Corporation Indicted for Alleged Mail and Wire Fraud SchemeRead the Press Release
WASHINGTON - A grant administrator and her daughter have been charged with participating in a scheme resulting in the theft of approximately $150,000 in federal grant funds awarded to a non-profit corporation in the Territory of American Samoa, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.
The 20-count indictment, returned late yesterday by a federal grand jury in the Northern District of California, charges Julie Matau, 48, and her daughter, Andrea Matau, 27, of San Francisco, Calif., each with one count of conspiracy to commit mail and wire fraud, theft of federal grant funds, false statements and falsification of records in a federal investigation; 17 counts of mail and wire fraud; and one count of theft of federal grant funds. Julie Matau is charged separately with one count of falsification of records in a federal investigation.
According to the indictment, U’una’i Legal Services Corporation (ULSC) was a non-profit corporation operating in the Territory of American Samoa from approximately 1998 to 2007. During this time period, ULSC was the only non-profit organization in American Samoa that provided free legal services to victims of domestic violence, dating violence, stalking and sexual abuse. It was also the only provider of legal representation for low income U.S. citizens and legal residents in other civil matters including adoptions, divorces and custody issues. From 2004 to 2007, ULSC relied on various sources of federal grant funding, including funding from the Legal Services Corporation (LSC) and the U.S. Department of Justice, Office of Violence Against Women (OVW).
The indictment alleges that Julie Matau and ULSC’s former acting executive director, David Wagner, submitted grant applications and status reports to obtain federal grant funds from LSC and OVW, and that they diverted approximately $150,000 to themselves and others, including Andrea Matau. The indictment also alleges that Julie Matau, assisted by another person working at her direction, created false time sheets and other documents for employees, including for herself, David Wagner and Andrea Matau, which purported to justify the diversion of funds as "comp time payments."
On March 11, 2010, David Wagner pleaded guilty to stealing $31,292 from the federally-funded organization and is awaiting sentencing. In his guilty plea, Wagner admitted to receiving "salary advances" and other payments to which he was not lawfully entitled, and signing blank checks for Julie Matau.
The conspiracy charge carries a maximum penalty of five years in prison. The mail and wire fraud counts each carry a maximum penalty of 20 years in prison, while the charge of federal grand fund theft carries a maximum penalty of 10 years in prison. Julie Matau faces an additional maximum penalty of 20 years in prison if convicted on the falsification of records charge. Each charged count also carries maximum fines of up to $250,000 or twice the gross gain.
An indictment is merely a charge and defendants are presumed innocent until proven guilty.
The case is being prosecuted by Senior Trial Attorney Mary K. Butler and Trial Attorney Edward J. Loya Jr. of the Criminal Division’s Public Integrity Section. The case is being investigated by special agents of the Legal Services Corporation Office of Inspector General; the Department of Justice, Office of the Inspector General; and the FBI.
Thursday 16 December 2010
Justice Department Files Complaint Against City of Brockton, Massachusetts, and Commonwealth of Massachusetts for Violating the Employment Rights of an Iraq War VeteranRead the Press Release
WASHINGTON – The Justice Department announced today the filing of a complaint against the city of Brockton, Mass., and the Commonwealth of Massachusetts, for violating the rights of an Iraq war veteran, under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA).
The lawsuit alleges that the defendants violated Brockton Police Sergeant Brian Benvie’s USERRA rights when they failed to fully recognize the retroactive promotion to sergeant he earned after taking a make-up promotional exam upon his return from active duty military service in Iraq in 2007. Benvie’s score on the exam placed him at the top of the promotional list, and he was promoted to sergeant in July 2008. Benvie subsequently learned that another patrolman with a score lower than his had been promoted to sergeant in October 2007. After initially refusing, the city eventually retroactively adjusted Benvie’s promotion to the date he would have been promoted but for his military service. However, the defendants subsequently failed to give full effect to that promotion by denying Benvie the opportunity to take the lieutenants’ promotional exam.
Among other things, the suit seeks to provide Benvie with a makeup exam for the lieutenants’ promotional exam that he was not permitted to take; place Benvie on the appropriate eligibility list based on his score on the lieutenants’ exam; and, should his score merit it, retroactively promote Benvie to lieutenant with all of the rights, benefits and seniority that he would have enjoyed if he had been permitted to take the exam in October 2008 and had achieved the same score.
"No service member should miss out on opportunities for advancement in the civilian workplace because he or she answered a call to duty," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "We will use all of the tools at our disposal to protect the rights of those men and women who serve our country and make sacrifices to protect our rights."
U.S. Attorney for the District of Massachusetts Carmen M. Ortiz said, "Our service men and women make the ultimate sacrifice by serving our country. We cannot allow employers to disadvantage them based on their military service or military status."
The Justice and Labor Departments place a high priority on the enforcement of service members’ rights under USERRA. "Our two agencies work closely together to ensure that our service members are treated right when they return from service," said Ray Jefferson, Assistant Secretary of Labor for Veterans’ Employment and Training Service.
This lawsuit arose as a result of a complaint Benvie filed with the U.S. Department of Labor (DOL). After an investigation, DOL determined that Benvie’s complaint had merit and referred the matter to the Justice Department. The case is being handled by the Employment Litigation Section of the Justice Department’s Civil Rights Division and the Civil Division of the U.S. Attorney’s Office for the District of Massachusetts.
Indiana Casino Dealer Found Guilty in Cheating ConspiracyRead the Press Release
WASHINGTON – Mike Waseleski, 46, a former casino card dealer, was found guilty by a federal jury yesterday in San Diego for his role in a cheating scheme by a group of conspirators known as the "Tran Organization" to steal approximately $1.5 million from Resorts East Chicago Casino, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Laura E. Duffy for the Southern District of California.
Waseleski, of Hammond, Ind., and six additional defendants were charged in a one-count indictment returned Sept. 1, 2009, with one count of conspiracy to commit several offenses against the United States, including conspiracy to transport stolen property in interstate commerce.
According to evidence presented at trial, Waseleski and others executed a "false shuffle" cheating scheme on games at Resorts East Chicago Casino, in East Chicago, Ind. According to evidence presented at trial, members of the criminal organization bribed casino card dealers, including Waseleski, to perform false shuffles during card games, thereby creating "slugs" or groups of unshuffled cards. After tracking the order of cards dealt in a card game, evidence showed that a member of the organization would signal to the card dealer to perform a false shuffle, and members of the group would then bet on the known order of cards when the slug appeared on the table. By doing so, members of the conspiracy allegedly repeatedly won thousands of dollars during card games, including winning several hundred thousand dollars on one occasion.
According to evidence presented at trial, members of the organization used sophisticated mechanisms for tracking the order of cards during games, including hidden transmitter devices and specially created software that would predict the order in which cards would reappear during blackjack games.
At sentencing, scheduled for March 28, 2011, Waseleski faces a maximum penalty of five years in prison, a $250,000 fine and payment of restitution to the victim.
The investigation of the Tran Organization’s alleged casino-cheating conspiracy has led to the filing of three separate indictments. The charges contained in the indictments are merely accusations and defendants are presumed innocent until proven guilty at trial beyond a reasonable doubt.
To date, 41 defendants have pleaded guilty to charges relating to the casino-cheating conspiracy, including: Phuong Quoc Truong, Tai Khiem Tran, Anh Phuong Tran, Phat Ngoc Tran, Martin Lee Aronson, Liem Thanh Lam, George Michael Lee, Tien Duc Vu, Son Hong Johnson, Barry Wellford, John Tran, Willy Tran, Tuan Mong Le, Duc Cong Nguyen, Han Truong Nguyen, Roderick Vang Thor, Sisouvanh Mounlasy, Navin Nith, Renee Cuc Quang, Ui Suk Weller, Phally Ly, Khunsela Prom, Hop Nguyen, Hogan Ho, Darrell Saicocie, Bryan Arce, Qua Le, Outtama Keovongsa, Leap Kong, Thang Viet Huynh, Don Man Duong, Dan Thich, Jimmy Ha, Eric Isbell, Brandon Pete Landry, James Root, Jesus Rodriguez, Jason Cavin, Nedra Fay Landry, Connie Holmes, and Geraldo Montaz. These defendants admitted to targeting, with the aid of co-conspirators, a combined total of approximately 27 casinos in the United States and Canada during the course of the conspiracy, including:
1) Beau Rivage Casino in Biloxi, Miss.;
2) Casino Rama, in Orillia, Ontario, Canada;
3) Foxwoods Resort Casino in Ledyard, Conn.;
4) Gold Strike Casino in Tunica, Miss.;
5) Horseshoe Casino in Bossier City, La.;
6) Horseshoe Casino and Hotel in Tunica, Miss.;
7) Isle of Capri Casino in Westlake, La.;
8) Majestic Star Casino in Gary, Ind.;
9) Mohegan Sun Resort Casino in Uncasville, Conn.;
10) Palace Station Casino in Las Vegas;
11) Resorts East Chicago Hotel and Casino in East Chicago;
12) Sycuan Casino in El Cajon, Calif.
13) Cache Creek Indian Bingo and Casino in Brooks, Calif.;
14) Emerald Queen Casino in Tacoma, Wash.;
15) Imperial Palace Casino in Biloxi;
16) Argosy Casino in Baton Rouge, La.;
17) Trump 29 Casino in Coachella, Calif.;
18) Isle of Capri Casino in Bossier City;
19) Agua Caliente Casino in Rancho Mirage, Calif.;
20) Spa Resort Casino in Palm Springs, Calif.;
21) Pechanga Resort and Casino in Temecula, Calif.;
22) L'Auberge du Lac Casino in Lake Charles, La.;
23) Nooksack River Casino in Deming, Wash.;
24) Barona Valley Ranch Casino and Resort in Lakeside, Calif.;
25) Caesars Indiana Hotel and Casino in Elizabeth, Ind.;
26) Monte Carlo Resort and Casino in Las Vegas; and
27) Harrah’s Casino in Lake Charles, La.
Two other defendants, Ha Thuy Giang and Tammie Huynh, pleaded guilty to tax offenses stemming from the investigation, and Khai Hong Tran admitted to the offenses alleged in a 2007 U.S. indictment when he pleaded guilty to casino-cheating offenses in Canada. Van Tran is scheduled for trial in February 2011.
The case is being investigated by the FBI’s San Diego Field Office; the Internal Revenue Service-Criminal Investigation; the San Diego Sheriff’s Department; and the California Department of Justice’s Bureau of Gambling Control. The investigation has received assistance from federal, state, tribal and foreign authorities, including: the Ontario Provincial Police; the National Indian Gaming Commission; the U.S. Attorney’s Office for the Western District of Washington; FBI Resident Agencies in Gulfport, Miss., Tacoma, Wash., and Toledo, Ohio; the Indiana State Police; the Rumsey Rancheria Tribal Gaming Agency; the Sycuan Gaming Commission; the Barona Gaming Commission; the Mississippi Gaming Commission; and the Washington State Gambling Commission.
The prosecution of the case is led by the Criminal Division’s Organized Crime and Racketeering Section (OCRS). OCRS Trial Attorneys Joseph K. Wheatley and Robert S. Tully are prosecuting the case in San Diego.
Formerly Convicted Maryland Tax Defier Indicted for Filing False Liens Against Prosecutor and for Filing False Claims for Tax RefundsRead the Press Release
WASHINGTON - Andrew Isaac Chance of Clinton, Md., was arrested on a four-count indictment charging him with filing a fraudulent multi-billion dollar lien against a government employee and filing false tax returns seeking $900,000 in false refunds, the Justice Department and the Internal Revenue Service (IRS) announced today. The indictment was returned on Dec. 13, 2010, by a federal grand jury sitting in Greenbelt, Md. No trial date has been set.
According to the indictment, Chance filed a false lien in the amount of $1.313 billion against the property of the Assistant U.S. Attorney who had prosecuted him for filing a false claim for a tax refund in 2007. The indictment also alleges that Chance filed three false income tax returns for estates and trusts for Andrew I. Chance Trust, for tax years 2007, 2008 and 2009. Each of these tax returns claimed a tax refund in the amount of $300,000.
In October 2007, Chance was convicted for filing a tax return for "ANDREW CHANCE TRUST" that claimed a tax refund in the amount of $306,753. On Oct. 15, 2007, Chance was sentenced to 27 months in prison. He was released from prison on June 12, 2009, and is currently on supervised release.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Chance faces a maximum of 25 years in prison and a maximum fine of $1 million dollars.
The case is being investigated by special agents with the IRS and the Treasury Inspector General for Tax Administration and is being prosecuted by Tax Division Trial Attorneys Jen E. Ihlo and Mark S. McDonald.
Five Indicted in Alabama for Roles in Tax Fraud and Identity Theft RingRead the Press Release
MONTGOMERY, Ala. – Five people were indicted by a federal grand jury in the Middle District of Alabama on a variety of charges stemming from an identity theft and tax fraud conspiracy, the Department of Justice and the Internal Revenue Service (IRS) announced today. Alchico Grant, Veronica Dale, Laquanta Grant, Isaac Dailey and Leroy Howard, were charged in a 39-count indictment that was returned on Dec. 14, 2010, and unsealed today.
All five defendants were charged with conspiring to defraud the United States by filing false claims. Dale was also charged with 24 counts of filing false tax returns, two counts of theft of government funds and two counts of aggravated identity theft. Additionally, Alchico Grant was charged with four counts of theft of government funds; Dailey was charged with three counts of theft of government funds; and Howard was charged with two counts of theft of government funds.
According to the indictment, the defendants were involved in a conspiracy which spanned almost two years and involved using stolen identities to file tax returns claiming millions of dollars in fraudulent refunds. The indictment alleges that Dale filed false tax returns using others’ names and Social Security numbers and deposited the fraudulent refunds into bank accounts that she and her co-conspirators controlled. Dale, Alchico Grant and Laquanta Grant recruited people to set up bank accounts to be used to deposit the tax refunds. Howard and Dailey were two of those who agreed to have their bank accounts used for receiving the fraudulently-obtained refunds. In addition, Alchico Grant attempted to persuade several witnesses to give false information to law enforcement about the scheme. In all, the conspirators defrauded the United States of more than $2 million over the course of the conspiracy.
An indictment merely alleges that crimes have been committed, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Dale faces a maximum of 154 years in prison, Alchico Grant faces a maximum of 50 years in prison, Dailey faces a maximum of 40 years in prison, Howard faces a maximum of 30 years in prison and Laquanta Grant faces a maximum of 10 years in prison.
IRS-Criminal Investigation agents investigated this case, and Justice Department Tax Division trial attorneys Jason Poole and Michael Boteler are prosecuting the case.
Detroit-area Doctor Sentenced to 36 Months in Prison for Medicare Fraud SchemeRead the Press Release
WASHINTON – Dr. Alan Silber was sentenced yesterday in Detroit to 36 months in prison for participating in a scheme to defraud the Medicare program, announced the Departments of Justice and Health and Human Services (HHS).
U.S. District Court Chief Judge Victoria A. Roberts ordered Silber of West Bloomfield, Mich., to pay approximately $649,000 in restitution, jointly and severally with co-defendants. Silber was also sentenced to 3years of supervised release to follow his prison term.
Silber, 48, was convicted by a federal jury in the Eastern District of Michigan on April 2, 2010, after a week-long trial, of six counts of heath care fraud. Between approximately November 2006 and March 2007, Silber and others caused nearly $1 million in false and fraudulent claims to be submitted to the Medicare program for services supposedly provided by Silber at RDM Centers Inc., a purported infusion clinic. Medicare actually paid more than $649,000 of those claims.
Evidence presented during Silber’s trial established that beginning in approximately November 2006 and continuing until March 2007, Silber routinely prescribed for patients at RDM medications that were medically unnecessary, and in many cases, never provided. In fact, the clinic existed for the purpose of causing fictitious claims for injection and infusion therapy services to be billed to Medicare. Silber was the only doctor who worked at RDM, and the owners of the clinic asked him to prescribe particular drugs to patients because they believed that Medicare would reimburse the medications at a high rate. Evidence at trial showed that Silber agreed to prescribe the medications even though he knew the patients did not need them.
According to court documents and evidence presented at trial, Medicare beneficiaries were not referred to RDM by their primary care physicians or for any legitimate medical purpose, but were recruited to come to the clinics in exchange for the payment of cash kickbacks. Trial evidence showed that in exchange for the cash kickbacks, the Medicare beneficiaries visited the clinic and signed documents indicating that they had received the services billed to Medicare.
All seven defendants charged in connection with RDM have pleaded guilty or have been convicted at trial for their roles in the fraud scheme.
Today’s sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade; Special Agent in Charge Andrew G. Arena of the FBI’s Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the HHS Office of Inspector General’s (OIG) Chicago Regional Office.
This case was prosecuted by Trial Attorney Benjamin D. Singer and Assistant Chief John Neal of the Criminal Division’s Fraud Section, and by Special Assistant U.S. Attorney Thomas Beimers from the Eastern District of Michigan. The FBI and HHS-OIG conducted the investigation. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.
Since their inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 825 individuals who collectively have falsely billed the Medicare program for more than $2 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .
Attorney General Holder and Secretary Sebelius Team up at Health Care Fraud Prevention Summit in BostonRead the Press Release
WASHINGTON – As part of the Obama Administration’s ongoing efforts to prevent and fight fraud in our nation’s healthcare system, Attorney General Eric Holder and U.S. Department of Health and Human Services Secretary Kathleen Sebelius visited Boston today, where they participated in the fourth Regional Health Care Fraud Prevention Summit. The summit brings together a wide array of federal, state and local partners, beneficiaries, providers and other interested parties to discuss innovative ways to eliminate fraud within the U.S. health care system.
In the District of Massachusetts, the Department of Justice has recovered more than $4 billion in civil and criminal health care fraud settlements over the past two years, including the $2.3 billion settlement with Pfizer Inc. in September 2009 – the largest health care fraud settlement in history.
"Here in Boston and in communities across the country, health care fraud schemes are being aggressively and permanently shut down. The District of Massachusetts, with U.S. Attorney Carmen Ortiz at its helm, has recovered more than $4 billion in civil and criminal health care fraud settlements over the past two years," said Attorney General Eric Holder. "These actions are in large part because of the great work being led by Health Care Fraud Prevention and Enforcement Action Team (HEAT). Through this initiative, we are working in partnership with government, law enforcement and industry leaders to protect taxpayer dollars, control health care costs, and ensure the strength and integrity of our most essential health care programs. Simply put, we have taken our fight against health case fraud to a new level, and I am committed to continued collaboration, vigilance and progress."
"This has been a remarkable year for cracking down on health care fraud – and our success has been built on initiatives like these combining the experience and insight of our law enforcement teams with new resources and cutting-edge technology," said Secretary Sebelius. "Thanks to the new tools and resources provided under the Affordable Care Act, we are more effective at going after the fraudsters that are stealing taxpayer dollars."
Joining Attorney General Holder and Secretary Sebelius at the University of Massachusetts-Boston, were Assistant Attorney General Tony West of the Civil Division and U.S. Attorney Carmen Ortiz of the District of Massachusetts. The summit also featured four educational panels aimed at identifying best practices for providers, law enforcement and beneficiaries in preventing health care fraud.
The recently enacted Affordable Care Act provides additional tools and resources to fight fraud in the health care system by providing an additional $350 million over the next 10 years through the Health Care Fraud and Abuse Control Account. The Act toughens sentencing for criminal activity, enhances screenings and enrollment requirements, encourages increased sharing of data across government, expands overpayment recovery efforts, and provides greater oversight of private insurance abuses. For information on the 2009 Health Care Fraud and Abuse Control Program Report, please visit: www.justice.gov/dag/pubdoc/hcfacreport2009.pdf.
Investments in fraud detection and enforcement pay for themselves many times over, and the Administration’s tough stance against fraud is already yielding results. In FY 2009, anti-fraud efforts put $2.51 billion back in the Medicare Trust Fund resulting from civil recoveries, fines in criminal matters and administrative recoveries. This was a $569 million, or 29 percent, increase over FY 2008. In FY 2009, more than $441 million in federal Medicaid money was returned to the U.S. Treasury, a 28 percent increase from FY 2008. Most recently, in FY 2010, the Department of Justice obtained settlements and judgments of more than $2.5 billion in False Claims Act matters alleging health care fraud. This is highest amount ever obtained in a single year, up from $1.68 billion in FY 2009.
The summits are part of the overall joint health care fraud fighting effort undertaken jointly by the Department of Justice and the Department of Health and Human Services through HEAT. As one part of HEAT’s efforts, Medicare Fraud Strike Force operations have expanded from South Florida and Los Angeles to a total of seven health care fraud hot spots including Houston; Detroit.; Brooklyn, N.Y.; Baton Rouge, La.; and Tampa, Fla. The Strike Force is a partnership between the Criminal Division’s Fraud Section, U.S. Attorneys’ Offices, HHS’ Office of Inspector General, FBI and other federal, state and local law enforcement partners. Since their inception in March 2007, Medicare Fraud Strike Force operations have obtained indictments of more than 850 individuals who collectively have falsely billed the Medicare program for more than $2.1 billion.
On June 8, 2010, President Obama announced this nationwide series of regional fraud prevention summits as part of a multi-faceted effort to crack down on health care fraud. The Boston summit was the fourth in a series, with additional summits to follow in the coming months in Detroit, Boston, Philadelphia and Las Vegas. Previous summits were held in Brooklyn (Nov. 5, 2010), Miami (July 16, 2010) and Los Angeles (Aug. 26, 2010).
Wednesday 15 December 2010
Pharmaceutical Companies to Pay $214.5 Million to Resolve Allegations of Off-label Promotion of ZonegranRead the Press Release
WASHINGTON – Irish pharmaceutical manufacturer Elan Corporation PLC and its U.S. subsidiary Elan Pharmaceuticals Inc. (EPI) have agreed to pay more than $203 million to resolve criminal and civil liability arising from the illegal promotion of the epilepsy drug Zonegran, the Justice Department announced today. In a separate civil settlement, Japanese drug marketer Eisai Inc., which purchased the drug from Elan, will pay $11 million to resolve civil liability for off-label marketing of Zonegran.
According to the agreement, Elan has agreed to plead guilty to an information charging it with misdemeanor misbranding of Zonegran, in violation of the Food, Drug and Cosmetic Act. Zonegran was approved by the Food and Drug Administration (FDA) as an anti-epileptic drug, for the treatment of partial epileptic seizures in adults over the age of 16, and was not approved for any other uses. Elan promoted the sale of Zonegran for a wide variety of improper off-label uses including mood stabilization for mania and bipolar disorder, migraine headaches, chronic daily headaches, eating disorders, obesity/weight loss and seizures in children under the age of 16. Elan’s off-label marketing efforts targeted non-epilepsy prescribers and the company paid illegal kickbacks to physicians in an effort to persuade them to prescribe Zonegran for these off-label uses. Under the terms of the plea agreement, Elan has agreed to pay a criminal fine of $97,050,266 and plead to a misdemeanor violation of the Food Drug and Cosmetic Act. EPI will also forfeit $3.6 million in assets.
In addition, Elan has agreed to pay $102,890,517 to resolve civil allegations under the False Claims Act and related state statutes that the company illegally promoted Zonegran and caused false claims to be submitted to government health care programs for a variety of uses that were not medically accepted indications and therefore not covered by those programs. The federal share of the civil settlement is $59,491,477, and the state Medicaid share of the civil settlement is $43,399,040.
The civil settlement resolves a whistleblower lawsuit filed by Dr. Lee Chartock, a Massachusetts physician, under the qui tam or whistleblower provisions of the False Claims Act that is pending in the District of Massachusetts: United States ex rel. Chartock, et al. v. Elan Corporation, PLC, et al., Civil Action No. 04-11594-RWZ. The qui tam provisions allow private citizens with knowledge of fraud to bring civil actions on behalf of the United States and share in any recovery.
As part of today’s resolution with Elan, Dr. Chartock will receive payments totaling more than $10 million from the federal share of the civil recovery. The civil settlement with Eisai also resolves allegations in the Chartock action. Dr. Chartock will receive payments totaling more than $1 million from the federal share of the Eisai civil recovery.
Also as part of the settlement, Elan has agreed to enter into a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services (OIG-HHS). That agreement requires Elan to institute procedures and reviews designed to avoid and promptly detect problematic conduct in the future. It also requires Elan to submit regular reports to OIG-HHS.
Under the settlement with Eisai, that company will pay $11 million to resolve civil allegations under the False Claims Act and related state statutes that the company illegally promoted Zonegran and caused false claims to be submitted to government health care programs for uses that were not medically accepted indications and therefore not covered by those programs. The federal share of the civil settlement is $6,341,751 and the state Medicaid share of the civil settlement is $4,658,249. Eisai purchased the drug and its sales force from Elan in April 2004. While Eisai retrained the sales force and took some steps to stop illegal marketing of the drug, some off-label marketing continued and Eisai benefitted from the previous off-label marketing by Elan.
"Off-label promotion of pharmaceutical products undermines the FDA’s important role in protecting the American public by determining whether a drug is safe and effective for a particular use before it is marketed," said Tony West, Assistant Attorney General for the Civil Division. "Such illegal conduct by pharmaceutical companies also costs the government billions of dollars, and these civil settlements and the criminal plea agreement by Elan demonstrate that such conduct will not be tolerated."
"This global resolution reflects the government’s continued commitment to combating pharmaceutical fraud in all its forms, especially where it affects the safe use of potent drugs being prescribed to children. We will continue to aggressively investigate and prosecute companies who intentionally put patient safety at risk in order to turn a profit," said U.S. Attorney Carmen M. Ortiz.
"Our priority is to protect taxpayer-funded government health care programs and beneficiaries," said Daniel R. Levinson, Inspector General of the Department of Health and Human Services. "If Elan – or any of its subsidiaries – intends in the future to actively promote drugs reimbursed by Federal health care programs, the company has agreed to accept even stricter amendments to the formal compliance program signed with OIG today."
"Today’s announcement signals the government’s commitment to investigate and prosecute companies that violate the law and choose to put their profits ahead of the public health" said Deputy Special Agent-in-Charge Kathleen Martin-Weis of FDA’s Office of Criminal Investigations. "The FDA will continue to pursue criminal resolutions when pharmaceutical companies undermine the drug approval process by promoting drugs for uses not approved by the FDA as safe and effective."
This settlement is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $5 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $6 billion.
The criminal case is being prosecuted by the U.S. Attorney’s Office for the District of Massachusetts and the Justice Department’s Office of Consumer Litigation. The civil settlements were reached by the U.S. Attorney’s Office and the Commercial Litigation Branch of the Justice Department’s Civil Division. The corporate integrity agreement was negotiated by the OIG-HHS. Assistance was provided by the National Association of Medicaid Fraud Control Units and the offices of various state attorneys general.
Justice Department Sues to Bar Florida Man from Promoting Alleged Tax Fraud SchemesRead the Press Release
WASHINGTON – The United States has sued an Orlando, Fla., man seeking to bar him from promoting two alleged tax-fraud schemes, the Justice Department announced today.
According to the government complaint in the civil injunction case in U.S. District Court for the Middle District of Florida, David Miner promotes a "decoder" scheme through a website. The government alleges that Miner falsely claims to be able to "decode" and "fix" Internal Revenue Service (IRS) records of his customers’ tax accounts so as to block the IRS from collecting the customers’ taxes. The complaint states that Miner charges each customer $1,800 for this purported service and claims to have helped more than 2,000 customers stop paying taxes.
The lawsuit also alleges that Miner promotes a "pure trust" abusive tax scheme at another website. According to the complaint, Miner charges customers $2,000 to establish "pure trusts" to evade paying federal income taxes, conceal their assets, and interfere with IRS collection efforts. The government alleges that Miner falsely advises his customers that assets purportedly contributed to the trusts may not be seized by personal creditors, including the IRS.
In the past decade, the Justice Department’s Tax Division has obtained injunctions to stop the promotion of tax-fraud schemes and the preparation of fraudulent returns. Information about these cases is available on the Justice Department website.
Complaint and Request for Injunctive Relief (PDF)
Justice Department Reaches Agreement with Philadelphia School District to Resolve Harassment AllegationsRead the Press Release
WASHINGTON – The Justice Department today announced a settlement agreement with the School District of Philadelphia and the School Reform Commission to resolve an investigation into a complaint of race, color and/or national origin-based harassment of Asian students at South Philadelphia High School, and allegations that the school district was deliberately indifferent to the severe and pervasive harassment. The Pennsylvania Human Relations Commission (PHRC) announced a separate agreement with the School District of Philadelphia and the School Reform Commission.
The complaint filed in U.S. District Court for the Eastern District of Pennsylvania, made by the Asian-American Legal Defense and Education Fund (AALDEF), alleged persistent harassment, including an incident in December 2009, in which approximately 30 Asian students were attacked and approximately 13 were sent to the emergency room. Under Title IV of the Civil Rights Act of 1964 and the Equal Protection Clause of the Fourteenth Amendment to the Constitution, school districts are required to protect students from harassment based on race, color, sex, national origin or religion.
With the cooperation of the district, AALDEF, numerous community advocacy groups, students, and numerous witnesses, the department conducted an extensive investigation of the school district’s policies and practices with regard to student-on-student harassment. The settlement agreement will ensure that the district: retains an expert consultant in the area of harassment and discrimination based on race, color and/or national origin to review the district’s policies and procedures concerning harassment; develops and implements a comprehensive plan for preventing and addressing student-on-student harassment at the high school; conducts training of faculty, staff and students on discrimination and harassment based on race, color and/or national origin and to increase multi-cultural awareness; maintains records of investigations and responses to allegations of harassment; and provides annual compliance reports to the department and the PHRC as well as makes harassment data publicly available.
"Schools have an obligation to ensure a safe learning environment for everyone. We will continue to use all of the tools in our law enforcement arsenal to ensure that all students can go to school without fearing harassment," said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. "I applaud the proactive steps taken by the school district to address this matter, as well as the courageous actions of students, parents and community leaders who came forward to call attention to the pervasive harassment."
Zane David Memeger, U.S. Attorney for the Eastern District of Pennsylvania, added that, "All children in the school district are the big winners today." Memeger said, "We hope that the investigation and our settlement agreement represent the start of a corrective action plan that eventually will eliminate student-on-student harassment in all Philadelphia public schools, not just South Philadelphia High School."
The enforcement of Title IV is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Justice Department’s Civil Rights Division is available on its website at www.justice.gov/crt. Additional information about the U.S. Attorney’s Office is available on its website at www.justice.gov/usao/pae.
Attorney General Holder Hosts Inaugural Meeting of Tribal Nations Leadership CouncilRead the Press Release
WASHINGTON – Attorney General Eric Holder today convened the inaugural meeting of the Justice Department’s Tribal Nations Leadership Council (TNLC), a group of tribal leaders from around the country who will advise him on issues critical to tribal communities. The TNLC marks the first time a council composed of tribal leaders selected by tribal governments will advise a cabinet member on an ongoing basis.
TNLC members include one tribal leader from each of the 12 regions of the Bureau of Indian Affairs, chosen by the tribes of that region, and two members from the Office of Justice Program’s Tribal Justice Advisory Group. The creation of the TNLC fulfills a pledge made by Attorney General Holder at the department’s Tribal Nations Listening Session in October 2009.
In addition to Attorney General Holder, tribal leaders met with senior leadership from numerous department components.
“The Tribal Nations Leadership Council will play an important role in continuing the critical government to government dialogue between the department and tribal governments on matters including public safety,” said Attorney General Holder. “The creation of the council has been a priority for me since my visit with tribal leaders last year and I believe it is a critical step in our work to improve coordination and collaboration with tribal communities.”
The TNLC is expected to meet bi-annually, and TNLC members will have a term of service of two years. The tribal leaders who comprise the initial council include:
Tribal Nations Leadership Council Members
- Marge Anderson, Chief Executive, Mille Lacs Band of Ojibwe Indians, Minnesota
- John Barrett, Jr., Chairman, Citizen Potawatomi Nation, Oklahoma
- Roman Duran, Lieutenant Governor, Pueblo of Tesuque, New Mexico
- Diane Enos, President, Salt River Pima-Maricopa Indian Community, Arizona
- Lynn Malerba, Chief, The Mohegan Tribe of Indians of Connecticut, Connecticut
- Willie Noseep, Co-Chair, Eastern Shoshone Business Council, Wyoming
- Ben Shelly, Vice President and President-Elect, Navajo Nation, Arizona
- Robert Smith, Chairman, Pala Band of Luiseno Mission Indians, California
- Ron Sparkman, Chairman, Shawnee Tribe, Oklahoma
- John F. Stensgar, Chairman of the Natural Resources Committee and Colville Business Council, Confederated Tribes of the Colville Reservation, Washington
- Michael J. Stickman, First Chief, Nulato Village, Alaska
- Roger Trudell, Chairman, Santee Sioux Tribe, Nebraska
Co-Chairs of the Tribal Justice Advisory Group
- Juana Majel Dixon, 1st Vice President-NCAI/TJAG Pacific Region, Pauma Yuima Band of Mission Indians, California
- Hope MacDonald-Lone Tree, Council Delegate/TJAG Navajo Region, Navajo Nation, Arizona
- This meeting marks another step in the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in tribal communities. This effort is driven largely by input gathered from the department’s 2009 Tribal Nations Listening Session, the department’s annual tribal consultation on violence against women, and from written comments submitted by tribal governments, groups and organizations to the Justice Department.
The meeting was also a valuable informational tool, a day in advance of the White House Tribal Nations Conference, at which Associate Attorney General Tom Perrelli, Assistant Attorney General for the Environmental and Natural Resources Division Ignacia Moreno, Deputy Assistant Attorney General for the Office of Justice Programs Mary Lou Leary and Office of Tribal Justice Director Tracy Toulou will co-host panels on tribal issues ranging from law enforcement to environmental concerns to education and social services.
To review the Department of Justice’s Tribal Nations Leadership Council Charter, visit: Tribal Nations Leadership Council Charter.
Attorney General Eric Holder Announces Civil Lawsuit Against Nine Defendants for Deepwater Horizon Oil SpillRead the Press Release
WASHINGTON – Attorney General Eric Holder announced today that the Justice Department has filed a civil lawsuit against nine defendants in the matter of the Deepwater Horizon Oil Spill. The lawsuit asks the court for civil penalties under the Clean Water Act and to declare eight of the defendants liable without limitation under the Oil Pollution Act for all removal costs and damages caused by the oil spill, including damages to natural resources.
In the complaint filed today in the U.S. District Court in New Orleans, the United States alleges violations of federal safety and operational regulations which caused or contributed to the oil spill that began on April 20, 2010 when an explosion and fire destroyed the Deepwater Horizon offshore drilling rig in the Gulf of Mexico, approximately 50 miles from the Mississippi River delta. This action will become part of the multi-district litigation pending before Judge Barbier in federal court in New Orleans.
“We intend to prove that these defendants are responsible for government removal costs, economic losses, and environmental damages without limitation,” said Attorney General Holder. “Even though the spill has been contained, the Department’s focus on investigating this disaster and preventing future devastation has not wavered. Both our civil and criminal investigations continue, and our work to ensure that the American taxpayers are not forced to bear the costs of restoring the gulf area and its economy is moving forward.”
The defendants named in the lawsuit are BP Exploration and Production Inc.; Anadarko Exploration & Production LP and Anadarko Petroleum Corporation (known collectively as “Anadarko Defendants”); MOEX Offshore 2007 LLC; Triton Asset Leasing GMBH, Transocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., and Transocean Deepwater Inc. (known collectively as “Transocean Defendants”); and Transocean’s insurer, QBE Underwriting Ltd./Lloyd’s Syndicate 1036. QBE/Lloyd’s can be held liable only up to the amount of insurance policy coverage under the Oil Pollution Act and is not being sued under the Clean Water Act.
According to the complaint, important safety and operating regulations were violated in the period leading up to the April 20, 2010 Oil Spill, including:
- Failing to take necessary precautions to keep the Macondo Well under control in the period leading up to the April 20th explosion;
- Failing to use the best available and safest drilling technology to monitor the well’s conditions;
- Failing to maintain continuous surveillance; and
- Failing to use and maintain equipment and material that were available and necessary to ensure the safety and protection of personnel, equipment, natural resources, and the environment.
The complaint alleges that these violations caused or contributed to the massive oil spill, and that the defendants are therefore responsible for removal costs and damages without limitation under the Oil Pollution Act.
The complaint also includes claims for civil penalties under the Clean Water Act, which prohibits the unauthorized discharge of oil into the nation’s waters. It alleges that the defendants named in the lawsuit were in violation of the Act throughout the months that oil was gushing into the Gulf of Mexico.
The ongoing civil investigation into the Gulf Spill is being handled by the Assistant Attorneys General Ignacia Moreno and Tony West of the Environment and Natural Resources Division and the Civil Division of the U.S. Department of Justice, the U.S. Environmental Protection Agency, the U.S. Coast Guard, the National Oceanic and Atmospheric Administration, and the Department of the Interior’s Bureau of Ocean Energy Management, Regulation and Enforcement and U.S. Fish and Wildlife Service.